Statement by the IMF Staff Mission to GrenadaPress Release No. 06/197
September 12, 2006
Ms. Nancy Wagner, head of an International Monetary Fund (IMF) staff mission to Grenada, issued the following statement on September 12, 2006 in St. George's:
"An IMF mission visited Grenada between August 31 and September 12, 2006 to review the implementation of the government's home-grown economic program that is supported by the IMF's Poverty Reduction and Growth Facility (PRGF). The mission held constructive discussions with the Prime Minister, the Deputy Prime Minister, the Minister of Finance and his staff, and representatives of various other ministries, public enterprises, the opposition, the business sector, and trade unions. Discussions centered on recent economic developments, fiscal performance, and progress with the government's structural reform agenda.
"The economy rebounded much faster than envisaged in 2005, with growth led by reconstruction and preparations for the 2007 Cricket World Cup. With the recovery occurring much quicker than anticipated, growth is set to slow in 2006. Going forward, agriculture will continue to recover, and prospects for the tourism sector look favorable, with a number of potential major investments on the horizon. Inflationary pressures that emerged in late 2005 on the heels of an adjustment of domestic fuel prices, have eased considerably in the first half of 2006.
"Although progress is being made on the fiscal front, including with the implementation of the National Reconstruction Levy, the budgetary situation remains challenging. This is in part due to a projected shortfall of foreign grants this year, which will increase the effort (including closer follow up with donors) needed to achieve the objectives of the 2006 budget. On the structural front, reforms have been initiated, but the pace of implementation should be stepped up to fully reap the benefits of these early efforts. While recognizing these challenges, the authorities underscored their deep commitment to the reform program. The IMF will continue to work closely with the authorities to assist them in the implementation of the program.
"The mission thanks the authorities for their warm hospitality and anticipates returning in the near term to continue discussions with a view to completing the first review under the PRGF program."