## 1. Financial Resilience Framework in the Context of Hurricane Beryl ## Source details **Canonical URL:** [1. Financial Resilience Framework in the Context of Hurricane Beryl](https://www.imf.org/-/media/files/publications/cr/2026/english/1grdea2026001-source-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2026/english/1grdea2026001-source-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2026/english/1grdea2026001-source-pdf.pdf.json) --- ### Context and structural features - Grenada: low-income small island developing state with recurring external shocks and structural constraints. - Growth model: heavily dependent on tourism and construction; both sectors are highly import dependent. - Monetary anchor: quasi-currency board under the Eastern Caribbean Currency Union (ECCU). - Fiscal rules: framework operational since 2015; provided a comparatively stronger fiscal foundation relative to regional peers. ### Recent macroeconomic developments - Real GDP growth: 3.3 percent in 2024 despite sizeable damages from Hurricane Beryl. - Tourism: record-high tourism arrivals in 2024 following an exceptionally strong 2023-24 winter season; tourism moderated in 2025H1. - Sectoral impacts: hurricane impact largely limited to agriculture and fisheries. - 2025 H1 activity: growth remained robust driven by (re)construction and public investment even as tourism inflows moderated. - Inflation: headline and core inflation continued to moderate, influenced by global food and fuel price trends and temporary post-hurricane tax-waivers through June 2025. - Citizenship by Investment (CBI): inflows normalized to historical levels after the 2022-24 surge; ECCU enacting Eastern Caribbean Citizenship by Investment Regulatory Authority (ECCIRA). - External position (preliminary): current account deficit estimated at 21.1 percent of GDP in 2024 (pending 2024 balance of payments release). Deficit widened due to deterioration in the service trade balance from commission payments associated with the 2023-24 CBI surge; financed by FDI, CBI capital transfers, and post-Beryl financing inflows. - Fiscal outturns and stocks (2024): - Primary fiscal surplus: 10 percent of GDP in 2024 (temporary suspension of the 1.5 percent of GDP primary balance rule). - Government deposits: 24.6 percent of GDP by end-2024. - Public debt: 72.5 percent of GDP. - By end-September 2025, government deposits declined to 21.7 percent of GDP amid reconstruction spending and normalization of non-tax (CBI) revenues. ### Financial sector developments - Bank credit growth: 10.4 percent year-on-year in 2024, driven by real estate and construction lending. - Bank asset quality: remains strong with modest Beryl impact. - Credit union lending: rapid growth; nonperforming loans (NPLs) at 6.5 percent of total loans (elevated but declining). - Insurance sector: post-Beryl claims had manageable impact due to broad-based underinsurance and limited local retention; global reinsurance capacity improvements eased premiums in 2025 renewals. ### Financial resilience to Hurricane Beryl (summary) - Hurricane Beryl: made landfall as a Category 4 storm on July 1, 2024 (Carriacou and Petite Martinique). - Post Disaster Needs Assessment: total loss and damages estimated at 17 percent of GDP (US$220m), primarily from housing (74 percent) and agriculture (11 percent). - Multi-layered financial resilience mobilization: - CCRIF parametric insurance payment: US$55.5 million, 4.0 percent of GDP. - Of the US$55.5 million: Central government received 44 (US$ millions), 3.2 percent of GDP; state-owned water and electricity companies received 11.5 (US$ millions), 0.8 percent of GDP. - World Bank Catastrophe Drawdown Option: US$20 million, 1.4 percent of GDP. - Disaster clause in restructured international bonds: deferred two scheduled payments (November 2024 and May 2025) totaling US$12 million, 0.9 percent of GDP; added to lump sum principal at maturity in 2030. - Recorded support measures: about 4½ percent of GDP through July 2025; authorities estimate total support to rise to about 6 percent of GDP by end-2025 (driven by further reconstruction spending). - Dedicated domestic contingency fund: 1.6 percent of GDP at end-September 2025. ### Outlook and risks - Growth projections: - GDP growth projected to accelerate to 4.4 percent in 2025, supported by reconstruction and investment-led activity. - Economy expected to revert to long-term potential growth rate in 2029 as construction contribution moderates from 2026; long-term potential estimated at 2.7 percent. - Inflation: projected to pick up gradually, reaching 2 percent from 2028 (in line with trading partners’ price dynamics). - Current account: - Projected to decline to 17½ percent of GDP in 2025 as exceptional CBI commission outflows end; expected to narrow further over the medium term but remain elevated until import-intensive infrastructure projects complete. - Fiscal paths and public finances: - 2025 central government primary balance projected deficit: 3.2 percent of GDP. - 2026 central government primary deficit projected: 3.5 percent of GDP. - Government deposits projected to decline to 8.6 percent of GDP by end-2026. - Accounting for off-budget Project Polaris borrowing would temporarily halt the decline in general government debt; 60 percent of GDP target projected to be achieved by 2033. - Grenada remains assessed to be in debt distress on account of unresolved official arrears (Debt Sustainability Assessment, DSA). - Key risks (tilted to the downside): - High natural disaster vulnerability. - Import and tourism dependency. - Potential disruptions to CBI and FDI inflows or to the local non-bank financial system. - Implementation delays or cost overruns from large public investments. - Upside risk: faster-than-projected tourism resort developments, particularly if Project Polaris catalyzes broader investment. ### Authorities’ views - Broad agreement with staff’s assessment of the outlook and risks; authorities more optimistic on near-term growth and the construction sector’s domestic value added and spillovers. - Authorities slightly more optimistic on near-term tourism compared with staff assessment. ### Policy implications and priorities - Fiscal rules: - Timely return to the fiscal rules framework in 2027 important to support fiscal discipline and return debt to a downward trajectory. - Upon resumption of the primary balance rule, target future surpluses above the primary balance floor from 2027 to mitigate fiscal risks from project delays or cost overruns and support timely achievement of the debt target. - Revenue and tax options: - Reform the income tax system, broaden the tax base, strengthen tax administration through digitalization and auditing improvements. - Consider environmental taxes (example: feebate system on vehicles) as alternatives to costly tax reductions to incentivize low-emission vehicles. - Consider a more rules-based cost-price pass-through formula for gasoline. - Social and transfers: - Continue improving targeting and coverage of government transfers under the Support for Education, Empowerment and Development (SEED) program to pave the way for eliminating untargeted price controls (e.g., cooking gas) over time. ### Project Polaris (healthcare flagship) - Description: 250-bed, climate-resilient research hospital; flagship healthcare transformation. - Cost and timing: - Expected cost: about US$250 million (17 percent of 2024 GDP). - Construction starting in 2026; staff projections assume about five years to build. - Financing and structure: - Executed off-budget through a special purpose statutory entity financed by concessional central government borrowing and a ten percent government equity contribution. - Financing includes repurposing the previously agreed US$100 million loan from the Saudi Fund for Development. - Project financing assumptions (included in public debt): repurposing of undrawn US$100 million SFD loan; US$125 million additional bilateral borrowing; US$25 million government equity. - Expected impacts and objectives: - Operated upon completion by the Grenada Hospital Authority. - Envisaged to catalyze development of an 84-acre “Medical City” via supplementary private investment in health tourism, biotechnology, and elder care. - Aligns with National Sustainable Development Plan 2020–2035; partnership with Mount Sinai; exploit synergies with St. George’s University. - Fiscal implications: - Off-budget Polaris borrowing delays projected reduction of public debt to 60 percent of GDP by three years (target now projected 2033) though debt dynamics remain sustainable under staff projections. - On a consolidated basis including Project Polaris, government projected to run fiscal deficits through 2030. ### Fiscal rules, perimeter gaps, and recommendations - Finding: Primary balance rule excludes increased SOE investments financed by central government on-lending and planned off-budget investment for Project Polaris, creating blind spots in debt dynamics. - Recommendation: Expand perimeter of the primary balance rule to cover debt-creating general government expenditure to align with the 60 percent of GDP general government debt anchor. - Interim measure: Include on-lending and off-budget investments in central government budget planning and accounts and subject them to equivalent reporting, oversight, and auditing requirements. - Key Fiscal Resilience Act 2023 metrics (as presented): - Debt Target: Public debt (including SOEs) must not exceed 60% of nominal GDP by 2035. - Primary Balance: Central government primary balance of at least 1.5% of nominal GDP is required until the debt target is met. - Wage Bill: Annual wage bill must not exceed 13% of nominal GDP. - Medium-Term Fiscal Framework (MTFF): Required to set out fiscal targets and projections for at least three years. - Role of FROC: Monitors compliance with FRA rules and reports annually to the House of Representatives. - Escape Clauses: Allows for suspension of fiscal targets during natural disasters and financial crises. - Illustrative scenario: 2 percent of GDP primary surpluses from 2027 would reduce debt to the target by 2032. ### SOE oversight, on-lending, and public investment management - Authorities expanding monitoring of Grenada’s 29 state owned enterprises and statutory bodies to address gaps in financial performance and risk oversight. - Near-term priorities: - Improve quality of standardized data reporting and integration with government fiscal data to transition toward comprehensive general government accounts in the MTFF. - Strengthen governance and accountability for SOEs, including conditioning budgetary support on compliance with reporting requirements. - Public investment risks: - Assess post-completion operating and maintenance costs of large public investment projects, including Project Polaris. - Operationalize the PPP framework to catalyze private investment related to Project Polaris. - Continue progress in project management and execution through the Ministry of Mobilisation, Implementation and Transformation. - Integrate management of sizeable government (CBI) savings, mostly in low-yielding local bank deposits, with debt management strategy and fiscal rules to optimize funding costs and shield budget envelopes from CBI revenue volatility. - Clear remaining backlog of audited government accounts (publication through 2019 completed; remaining backlog should be cleared swiftly). - On-lent loans (EC$ millions, year-end): 2019: 36.7; 2020: 41.9; 2021: 111.7; 2022: 113; 2023: 183.9; 2024: 201.8. - Total on-lent loans (percent of GDP): 2019: 1.1; 2020: 1.5; 2021: 3.7; 2022: 3.4; 2023: 5.1; 2024: 5.4. - Note: Non-guaranteed debt of these entities estimated at 14.2 percent of GDP at end-2024. ### Financial system risks and supervisory priorities (non-bank vulnerabilities) - Finding: Near-term financial system risks modest, but accelerating bank credit growth and non-bank vulnerabilities warrant enhanced monitoring. - Supervisory priorities and recommendations: - Enhance monitoring, data reporting, and regional supervisory cooperation for general insurance sector given low insurance penetration and recent reinsurance-market softening. - Address supervisory gaps in the rapidly growing credit union sector: - Expand reporting templates to include granular information on forbearance exposures, breakdowns of past due dates, accumulated impairments by stages, and classification of restructured/refinanced loans. - Complement IFRS9 model-based provisioning with calendar-based backstops for long-overdue loans in low property market liquidity contexts. - Continue development of stress testing capacity for early risk identification. - Maintain a strong AML/CFT regime; address technical compliance gaps from the 2022 CFATF Mutual Evaluation Report and prepare an updated National Risk Assessment. - Selected financial stability indicators (2024, selected metrics): - Credit Growth, Banks: 10.4 - Credit Growth, Credit Unions: 10.6 - Deposit-to-loan ratio, Banks: 186.9 - FX liabilities / Total liabilities, Banks: 20.2 - FX loans / Total loans, Banks: 15.2 - Return on Assets, Banks: 1.2 - Non-performing Loan Ratio, Banks: 2.9 - Provisions for Loan Losses to NPLs, Banks: 87.7 - Liquidity Assets, Banks: 52.3 - Capital Adequacy Ratio, Banks: 14.5 ### Long-term growth potential and policy pillars - Finding: Growth potential muted; high reliance on foreign inputs and FDI ownership limits domestic value added; labor gains tend toward low-skilled services. - Four recommended dimensions: 1. Facilitating local private investment: - Address access to finance constraints for MSMEs. - Leverage regional initiatives (Eastern Caribbean Partial Credit Guarantee Scheme, credit reporting bureau), develop a movable collateral framework, provide centralized small business outreach and capacity building. - Deepen regional capital markets and enhance digital banking, payment systems, and e-commerce adoption. 2. Strengthening tourism’s domestic value-added: - Foster locally offered tourism services and integration with the local economy; leverage event- and eco-tourism for off-season arrivals; broaden flight connectivity. - Use infrastructure (e.g., Project Polaris) to diversify into niche markets such as health tourism and elder care. 3. Reducing goods trade frictions: - Address high shipping costs; improve port infrastructure; streamline administrative processes; harmonize customs procedures; explore diversifying import source countries. 4. Strengthening human capital, productivity, and shock resilience: - Invest in youth-focused technical and vocational training, digital job-matching platforms, and education modernization. - Enhance domestic health services; continue digitalization (e.g., Caribbean Digital Transformation Project) and energy diversification (solar and geothermal); prioritize grid upgrades and align regulations with the National Energy Policy. - Ensure public infrastructure investments pay close attention to disaster resilience in line with the Disaster Resilience Strategy and updated National Adaptation Plan. ### Institutional capacity and data gaps - Finding: Data shortcomings hamper surveillance: dissemination delays, gaps in current account and FDI recording, outdated CPI weights, and absence of GDP expenditure data. - Recommendations: - Strengthen staffing capacity and Balance of Payments compilation. - Improve timeliness and coverage of public data dissemination, coordinated with CARTAC. - Prioritize Fund engagement on public financial management, revenue administration, financial system supervision, and data adequacy. - Capacity constraint note: Persistent staffing shortages and turnover across government constrain local absorption capacity and reform implementation. ### External sector and reserves (selected indicators and observations) - Current account balance (percent of GDP, selected): 2024: -21.1; 2025 projection: -17.5. - Exports of goods and services (USD, selected years): 2024: 821.5 (millions USD); tourism 2024: 664.1 (millions USD). - Imports of goods and services (2024): 978.9 (millions USD). - ECCB imputed reserves (millions USD, selected): 2024: 410.2. - ECCB imputed reserves (months of imports, 2024): 5.0 months. - Gross external debt (percent of GDP, 2024): 83.8. - Observations: - Current account large but narrowed modestly in recent periods; 2024 improvement financed with FDI and capital transfers (CBI). - Real effective exchange rate depreciated by 2.1 percent in 2024; REER gap assessed at 9.8 percent (EBA-Lite CA model) with staff midpoint assessment of 9.1 percent overvaluation. ### Debt sustainability and DSA headline findings - Grenada remains in public debt distress solely on account of unresolved official arrears of about US$38 million (2.7 percent of GDP) as of end-2024. - External and public debt assessed as sustainable; capacity to meet current and future debt service obligations without debt relief or accumulating additional arrears. - One-off near-term breach of debt-service-to-revenue threshold reflecting temporary increased payments to restructured international bondholders. - Project Polaris borrowing ("close to 16 percent of 2024 GDP") would delay achievement of 60 percent of GDP public debt target by four years but would not breach debt burden thresholds. - Public debt composition (end-2024, percent of GDP): - Total Public Sector debt: 72.7 percent of GDP. - A. Public sector debt (excl. non-guaranteed SOE debt): 58.7 percent of GDP. - B. SOE non-guaranteed debt: 14.0 percent of GDP (PetroCaribe Grenada: 9.9 percent; Other SOE non-guaranteed debt: 4.1 percent). - Central government external debt: 48.4 percent of GDP (Multilateral: 32.2 percent; Official bilateral: 8.3 percent; Commercial debt: 7.7 percent). - Domestic debt: 13.3 percent of GDP. - Nominal GDP (2024): 1395.5 (millions or index as presented). - Key DSA stress-test calibrations: - Natural disaster scenario: 5 percent of GDP, or 2.5 percentage points (whichever higher), rise in debt in first two years following a hurricane. - Export shock calibration: decline in exports of goods and services by 16 percent of GDP in 2025 and another 12.5 percent of GDP in 2026. ### Buffers, contingent financing, and disaster resilience - Buffers: - Savings from past CBI revenues provide substantial buffer; government deposits nearly 25 percent of GDP in 2024 (declining thereafter). - Contingent financing instruments: CCRIF payout (US$55.5 million), World Bank Catastrophe Drawdown Option (US$20 million), disaster clause deferral (about US$12 million). - Disaster Resilience Strategy (DRS) implications: - Dedicated financial protection against natural disasters amounted to 7¼ percent of GDP in 2020 (illustrative). - DRS implementation upside: potential steady state level of potential output 3 percent higher if public capital stock 80 percent resilient. ### Risk Assessment Matrix — selected risks and recommended responses - Conjunctural (High / ST, MT): Geopolitical tensions, escalating trade measures, commodity price volatility, financial market volatility, decline in international aid. - Recommended responses include targeted transfers to vulnerable, diversification of tourism source markets, accelerate renewables, maintain financial buffers, strengthen supervision. - Structural and domestic risks: Climate change (Medium / ST), cyberthreats (High / ST, MT), fiscal underperformance and CBI reputational risks. - Recommended responses: continue DRS implementation, enhance digital security, improve CBI governance, broaden non-CBI revenue base. - Consolidated immediate policy actions: - Provide targeted transfers/support to vulnerable households. - Diversify tourism source markets and increase tourism value-added. - Accelerate renewable energy transition and implement symmetric, rules-based gasoline price mechanism. - Strengthen financial supervision and maintain loss-absorbing buffers in coordination with the ECCB. - Improve CBI program governance and broaden non-CBI revenue base. - Continue Disaster Resilience Strategy implementation and enhance post-disaster response capacity. - Enhance digital security and contingency planning. ### Sensitivity analysis of external shocks (tourism and import-price channels) - Tourism transmission channel: - Source-market shares of stayover arrivals: US: 41 percent; UK: 12 percent; Canada: 7 percent. - PPML regression key elasticity results: - Source Country Real GDP (log): 0.81*** (standard error 0.12). - Bilateral REER (log): -0.27*** (standard error 0.08). - Caricom interaction: -0.10** / -0.10*** across specs. - US-specific interaction: 1.04* (standard error 0.58). - Benchmark elasticity applied: 1.2 (after adjusting for US share). - Scenario: 1 percent decline in source countries’ GDP → stayover arrivals decline by 1.2 percent → estimated loss in tourism receipts EC$21 million → equivalent effect on exports and current account: 0.34 percentage points of GDP decline → estimated reduction in real GDP growth relative to baseline: 0.12 percentage points. - Inflation via import channel: - Moderate 10 percent global food prices shock: headline CPI +0.15 percentage points. - Moderate 10 percent global fuel prices shock: headline CPI +0.18 percentage points. - Hypothetical 50 percent increase in shipping costs: CIF import price ↑ ~2 percent; staff assessment: imports account for 15 percent of Grenada’s core CPI basket → implied increase in core CPI inflation: 0.3 percentage points. - Hypothetical effective tariff increase of 8 percentage points on U.S.-sourced imports: affected share of core CPI basket roughly 3 percent → potential maximum increase in core CPI inflation: 0.24 percentage points. - Assessment: near-term impacts modest and transitory, but compound effects possible if multiple risks materialize jointly. ### Data, capacity development, and IMF engagement priorities - Data gaps: national accounts delays, absence of GDP expenditure data, outdated CPI weights, gaps in current account and FDI recording, tourism expenditure survey limitations, discrepancies in import statistics. - Priority corrective actions: - Release the Census and updated CPI weights. - Strengthen Balance of Payments compilation and timeliness of public data dissemination (CARTAC support). - Improve non-bank financial soundness data granularity and strengthen supervisory data on reinsurance. - IMF Small State Engagement Strategy (SSES) focus (2026-28): fiscal and debt sustainability, financial stability and intermediation (credit unions, insurance), strong inclusive growth (tourism value added, MSMEs), natural disaster resilience and energy security. - CD and TA chronology: extensive IMF/CARTAC missions across public financial management, BOP/IIP, tax administration, PFM, risk-based supervision, credit-union stress testing, GDP rebasing, external sector statistics, and project management support (selected mission dates preserve as presented). *Source: IMF staff synthesis of chapter "1. Financial Resilience Framework in the Context of Hurricane Beryl" from the provided PDF content.* ### 1. Financial Resilience Framework in the Context of Hurricane Beryl ______________________________ 7 ### 1. Financial Resilience Framework in the Context of Hurricane Beryl ### Context and structural features - Grenada is described as a low-income small island developing state with recurring external shocks and structural constraints. - Growth model depends heavily on tourism and construction; both sectors are highly import dependent. - The quasi-currency board under the Eastern Caribbean Currency Union (ECCU) serves as an anchor for monetary stability. - Fiscal rules framework has been operational since 2015 and supported a comparatively stronger fiscal foundation relative to regional peers. ### Recent macroeconomic developments - Real GDP growth: 3.3 percent in 2024 despite sizeable damages from Hurricane Beryl. - Tourism: record-high tourism arrivals in 2024 following an exceptionally strong 2023-24 winter season. - Sectoral impacts: hurricane impact largely limited to agriculture and fisheries. - 2025 first-half activity: growth remained robust driven by (re)construction and public investment even as tourism inflows moderated. - Inflation: headline and core inflation continued to moderate, influenced by global food and fuel price trends and temporary post-hurricane tax-waivers through June 2025. - Citizenship by Investment (CBI) inflows: normalized to historical levels after the 2022-24 surge and backlog clearance; ECCU enacting regional CBI regulator (Eastern Caribbean Citizenship by Investment Regulatory Authority, ECCIRA). - External position: current account deficit estimated at 21.1 percent of GDP in 2024 (preliminary estimate pending 2024 balance of payments release). The deficit widened due to deterioration in the service trade balance from commission payments associated with the 2023-24 CBI surge; financed by FDI, CBI capital transfers, and post-Beryl financing inflows. - Fiscal outturns and stocks (2024): - Primary fiscal surplus: 10 percent of GDP in 2024 (temporary suspension of the 1.5 percent of GDP primary balance rule). - Government deposits: 24.6 percent of GDP by end-2024. - Public debt: 72.5 percent of GDP. - By end-September 2025, government deposits declined to 21.7 percent of GDP amid reconstruction spending and normalization of non-tax (CBI) revenues. ### Financial sector developments - Bank credit growth: 10.4 percent year-on-year in 2024, driven by real estate and construction lending. - Bank asset quality: remains strong with modest Beryl impact. - Credit union lending: rapid growth; nonperforming loans (NPLs) at 6.5 percent of total loans (elevated but declining). - Insurance sector: post-Beryl claims had manageable impact due to broad-based underinsurance and limited local retention; global reinsurance capacity improvements eased premiums in 2025 renewals. ### Financial resilience to Hurricane Beryl (Box 1: summary) - Hurricane Beryl made landfall as a Category 4 storm on July 1, 2024 (Carriacou and Petite Martinique). - Post Disaster Needs Assessment estimated total loss and damages at 17 percent of GDP (US$220m), primarily from housing (74 percent) and agriculture (11 percent). - Multi-layered financial resilience framework delivered rapid financing mobilization: - Caribbean Catastrophe Risk Insurance Facility (CCRIF) parametric insurance payment: US$55.5 million, 4.0 percent of GDP. - Of that US$55.5 million: Central government received 44 (US$ millions), 3.2 percent of GDP; state-owned water and electricity companies received 11.5 (US$ millions), 0.8 percent of GDP. - World Bank Catastrophe Drawdown Option: US$20 million, 1.4 percent of GDP. - Disaster clause in restructured international bonds: deferred two scheduled payments (November 2024 and May 2025) totaling US$12 million, 0.9 percent of GDP; added to lump sum principal at maturity in 2030. - Recorded support measures totaled about 4½ percent of GDP through July 2025; authorities estimate total support to rise to about 6 percent of GDP by end-2025 (driven by further reconstruction spending). - Dedicated domestic contingency fund: 1.6 percent of GDP at end-September 2025. ### Outlook and risks - Growth projections: - GDP growth projected to accelerate to 4.4 percent in 2025, supported by reconstruction and investment-led activity. - Economy expected to revert to long-term potential growth rate in 2029 as construction contribution moderates from 2026. - Inflation: projected to pick up gradually, reaching 2 percent from 2028 (in line with trading partners’ price dynamics). - Current account: projected to decline to 17½ percent of GDP in 2025 as exceptional CBI commission outflows end; expected to narrow further over the medium term but remain elevated until import-intensive infrastructure projects complete. - Fiscal paths and public finances: - 2025 central government primary balance projected deficit: 3.2 percent of GDP. - 2026 central government primary deficit projected: 3.5 percent of GDP. - Government deposits projected to decline to 8.6 percent of GDP by end-2026. - Accounting for off-budget Project Polaris borrowing would temporarily halt the decline in general government debt; 60 percent of GDP target projected to be achieved by 2033. - Grenada remains assessed to be in debt distress on account of unresolved official arrears (Debt Sustainability Assessment, DSA). - Key risks (tilted to the downside): - High natural disaster vulnerability. - Import and tourism dependency. - Potential disruptions to CBI and FDI inflows or to the local non-bank financial system. - Implementation delays or cost overruns from large public investments. - Upside risk: faster-than-projected tourism resort developments, particularly if Project Polaris catalyzes broader investment. ### Authorities’ views - Authorities broadly agreed with staff’s assessment of the outlook and risks but remain more optimistic on near-term growth and the construction sector’s domestic value added and spillovers. - Authorities slightly more optimistic on near-term tourism compared with staff assessment. ### Policy implications and priorities - Timely return to the fiscal rules framework in 2027 important to support fiscal discipline and return debt to a downward trajectory. - Measures upon resumption of the primary balance rule to protect and expand budget space for public investment priorities: - Target future surpluses above the primary balance floor from 2027 to mitigate fiscal risks from project delays or cost overruns and support timely achievement of the debt target. - Revenue measure options: reform the income tax system, broaden the tax base, strengthen tax administration through digitalization and auditing improvements. - Consider environmental taxes (example: feebate system on vehicles) as alternatives to costly tax reductions to incentivize low-emission vehicles. - Consider a more rules-based cost-price pass-through formula for gasoline. - Continue improving targeting and coverage of government transfers under the Support for Education, Empowerment and Development (SEED) program to pave the way for eliminating untargeted price controls (e.g., cooking gas) over time. ### Project Polaris (Box 2) - Project description: flagship healthcare transformation centered on a 250-bed, climate-resilient research hospital. - Cost and timing: - Expected cost: about US$250 million (17 percent of 2024 GDP). - Construction starting in 2026; staff projections assume about five years to build. - Financing and structure: - Executed off-budget through a special purpose statutory entity financed by concessional central government borrowing and a ten percent government equity contribution. - Financing includes repurposing the previously agreed US$100 million loan from the Saudi Fund for Development. - Expected impacts and objectives: - Operated upon completion by a new statutory agency, Grenada Hospital Authority. - Envisaged to catalyze development of an 84-acre “Medical City” via supplementary private investment in health tourism, biotechnology, and elder care. - Seeks alignment with Grenada's National Sustainable Development Plan 2020–2035, strengthen health service quality via partnership with Mount Sinai, reduce reliance on overseas specialized care, exploit synergies with St. George’s University medical programs, and address capacity constraints of the existing 198-bed General Hospital. - Fiscal implications: - Off-budget Polaris borrowing delays projected reduction of public debt to 60 percent of GDP by three years (target now projected 2033) though debt dynamics remain sustainable under staff projections. *Source: IMF staff synthesis of chapter "1. Financial Resilience Framework in the Context of Hurricane Beryl" from the provided PDF content.* ### 16. A more comprehensive primary balance floor would better align it with the ### 16. A more comprehensive primary balance floor would better align it with the authorities’ 60 percent of GDP general government debt anchor ### Fiscal rules, perimeter gaps, and recommendations - Finding: The primary balance rule excludes increased state-owned enterprise (SOE) investments financed by central government on-lending and planned off-budget investment for Project Polaris, creating potential blind spots in debt dynamics. - Recommendation: Expand the perimeter of the primary balance rule to cover debt-creating general government expenditure, ensuring alignment with the 60 percent of GDP general government debt anchor. - Interim measure: Include on-lending and off-budget investments in central government budget planning and accounts and subject them to equivalent reporting, oversight, and auditing requirements to ensure transparency of fiscal operations. - Key rule metrics under the Fiscal Resilience Act 2023 (as presented): - Debt Target: Public debt (including SOEs) must not exceed 60% of nominal GDP by 2035. - Primary Balance: A central government primary balance of at least 1.5% of nominal GDP is required until the debt target is met. - Wage Bill: The annual wage bill must not exceed 13% of nominal GDP. - Medium-Term Fiscal Framework (MTFF): Required to set out fiscal targets and projections for at least three years. - Role of FROC: Monitors compliance with FRA rules and reports annually to the House of Representatives. - Escape Clauses: Allows for the suspension of fiscal targets during natural disasters and financial crises. - Illustrative scenario noted in text: For example, 2 percent of GDP primary surpluses from 2027 would reduce debt to the target by 2032. ### SOE oversight, on-lending, and public investment management - Finding: Authorities are expanding monitoring of Grenada’s 29 state owned enterprises and statutory bodies to address gaps in financial performance and risk oversight. - Near-term priorities: - Improve the quality of standardized data reporting and integration with government fiscal data to transition toward more comprehensive general government accounts in the MTFF. - Strengthen governance and accountability measures for SOEs, including conditioning budgetary support on compliance with reporting requirements. - Public investment risks and management: - Post-completion operating and maintenance costs of ongoing and planned large public investment projects, including Project Polaris, require careful assessment to manage long-term fiscal risks. - Operationalize the public-private partnership framework to catalyze private investment related to Project Polaris. - Continue progress in project management and execution through the Ministry of Mobilisation, Implementation and Transformation. - Integrate management of sizeable government (CBI) savings, mostly in low-yielding local bank deposits, with debt management strategy and the fiscal rules framework to optimize funding costs and shield budget envelopes from potential CBI revenue volatility. - Clear remaining backlog of audited government accounts (publication through 2019 has been completed; remaining backlog should be cleared swiftly). - On-lent loans disbursements and balances (Year end, in millions of EC dollars unless otherwise indicated; totals and percent of GDP shown in source): - Total on-lent loans (EC$ millions): 2019: 36.7; 2020: 41.9; 2021: 111.7; 2022: 113; 2023: 183.9; 2024: 201.8. - Total (percent of GDP): 2019: 1.1; 2020: 1.5; 2021: 3.7; 2022: 3.4; 2023: 5.1; 2024: 5.4. - Note: The non-guaranteed debt of these entities is estimated to be 14.2 percent of GDP at end-2024. ### Financial system risks and supervisory priorities (non-bank vulnerabilities) - Finding: Near-term financial system risks remain modest, but accelerating bank credit growth and non-bank vulnerabilities warrant enhanced monitoring. - Context: Recent bank credit growth is rapid in the post-disaster recovery context and reflects normalization of credit conditions; Grenadian banks display strong asset quality and high system liquidity. - Supervisory priorities and recommendations: - Enhance monitoring, data reporting, and regional supervisory cooperation for the general insurance sector given low insurance penetration and recent reinsurance-market softening. - Address supervisory gaps in the rapidly growing credit union sector as a high priority: - Expand reporting templates to include granular information on forbearance exposures, breakdowns of past due dates, accumulated impairments by stages, and prudent classification of restructured/refinanced loans. - Complement IFRS9 model-based provisioning with calendar-based backstops to ensure provisioning adequacy for long-overdue loans in contexts of limited property market liquidity. - Continue development of stress testing capacity for early risk identification. - Maintain a strong AML/CFT regime; authorities are addressing remaining technical compliance gaps from the 2022 CFATF Mutual Evaluation Report and preparing an updated National Risk Assessment. - Selected financial stability indicators (selected years and metrics from source): - Credit Growth (year-on-year change), Banks: 2024: 10.4. - Credit Growth, Credit Unions: 2024: 10.6. - Deposit-to-loan ratio, Banks: 2024: 186.9. - FX liabilities / Total liabilities, Banks: 2024: 20.2. - FX loans / Total loans, Banks: 2024: 15.2. - Return on Assets, Banks: 2024: 1.2. - Non-performing Loan Ratio, Banks: 2024: 2.9. - Provisions for Loan Losses to NPLs, Banks: 2024: 87.7. - Liquidity Assets, Banks: 2024: 52.3. - Capital Adequacy Ratio, Banks: 2024: 14.5. - (Additional historical series for these indicators appear in the source.) ### Long-term growth potential and policy pillars - Finding: Grenada’s growth potential has remained muted despite tourism development and resilience to shocks. High reliance on foreign inputs and FDI ownership limits domestic value added; labor gains tend toward low-skilled services. - Four recommended dimensions to raise long-term growth and resilience: - Facilitating local private investment: - Address access to finance constraints for MSMEs. - Leverage regional initiatives (e.g., Eastern Caribbean Partial Credit Guarantee Scheme, credit reporting bureau), develop a movable collateral framework, and provide centralized small business outreach and capacity building. - Deepen regional capital markets and enhance digital banking, payment systems, and e-commerce adoption to improve financial inclusion and reduce transaction costs. - Strengthening tourism’s domestic value-added: - Foster locally offered tourism services and integration with the local economy. - Leverage event- and eco-tourism for off-season arrivals; broaden flight connectivity. - Use infrastructure investment (e.g., Project Polaris) to diversify into niche markets such as health tourism and elder care. - Reducing goods trade frictions: - Address high shipping costs due to limited accessibility and weak maritime connectivity. - Improve port infrastructure, streamline administrative processes, harmonize customs procedures, and explore diversifying import source countries. - Strengthening human capital, productivity, and shock resilience: - Invest in youth-focused technical and vocational training, digital job-matching platforms, and education modernization. - Enhance domestic health services to reduce reliance on overseas specialized care. - Continue digitalization (e.g., Caribbean Digital Transformation Project) and energy diversification (solar and geothermal), prioritize grid upgrades, and align regulations with the National Energy Policy. - Ensure public infrastructure investments pay close attention to disaster resilience in line with the Disaster Resilience Strategy and updated National Adaptation Plan. ### Institutional capacity and data gaps - Finding: Data shortcomings hamper surveillance: dissemination delays, gaps in current account and FDI recording, outdated CPI weights, and absence of GDP expenditure data. - Recommendations: - Strengthen staffing capacity and Balance of Payments compilation. - Improve timeliness and coverage of public data dissemination, coordinated with CARTAC. - Prioritize Fund engagement on public financial management, revenue administration, financial system supervision, and data adequacy. - Capacity constraint note: Persistent staffing shortages and turnover across government constrain local absorption capacity and reform implementation. *Source: IMF staff report text as provided.* ### 29. The ECCB has taken steps to address most of the recommendations from the previous ### 1grdea2026001-source-pdf - 29. The ECCB has taken steps to address most of the recommendations from the previous ### Authorities’ Views - Authorities concurred with the importance of strengthening economic data to support evidence-based policy analysis. - Ongoing public sector regularization efforts could support retention and help alleviate resource constraints. - Continued efforts, partly with support from partner organizations, to: - return to regular updates of the quarterly labor force survey, and - publish a revised CPI basket in the coming months. ### Staff Appraisal — Outlook and Macroeconomic Assessment - Grenada’s economy: - continues to navigate elevated global uncertainties effectively in the aftermath of Hurricane Beryl. - economic activity remains robust, with strong investment and construction more than offsetting a moderation in tourism inflows. - Major public infrastructure projects will sustain buoyant construction over the medium-term, extending the gradual moderation in overall growth toward its long-term potential. - Current low inflation is expected to gradually normalize by 2028. - External position and current account: - Grenada’s external position in 2024 is assessed as weaker than the level implied by medium-term fundamentals and desirable policies. - the large current account deficit will remain elevated over the medium-term until construction import pressures subside. - Fiscal position: - Notwithstanding near-term fiscal deficits amid reconstruction and other priority spending, the underlying fiscal position remains sound. ### Risks to the Outlook - Downside risks persist amid heightened global economic and geopolitical uncertainties, including: - Grenada’s high vulnerability to natural disasters and reliance on tourism and imports. - potential disruptions to CBI and FDI inflows. - materialization of risks in the domestic non-bank financial system. - delays or cost overruns in large investment projects. - Upside risk: - Faster-than-expected expansion in tourism capacity represents a key upside risk. - Buffers: - A robust disaster resilience framework and government deposits provide important buffers against shocks. ### Fiscal Policy and Fiscal Rules - Temporary suspension of the primary balance rule: - Provided fiscal space for post-disaster reconstruction without disrupting other priority spending. - Returning to the fiscal rules in 2027 is important to safeguard fiscal discipline and keep debt on a sustainable path. - Recommendations to preserve fiscal space: - Continued expenditure prudence alongside revenue-enhancing measures. - Primary balance rule perimeter: - Could be better aligned with the general government debt anchor. - Capturing government off-budget and public on-lending-financed investments would help ensure the rule effectively restrains debt-creating spending. - Interim measure: include such investments in central government budget planning and adhere to equivalent reporting and auditing standards. - SOE and statutory body oversight: - Recent progress should continue with a view to eventually integrating these into the Medium-Term Fiscal Framework. ### Public Investment, Project Management, and CBI - Public investment projects: - Ambitious projects address important development needs but pose associated fiscal risks requiring careful management. - Continue strengthening project management to minimize delays or cost overruns. - Carefully assess future operating and maintenance costs to avoid unfunded liabilities. - Private investment and PPPs: - Plans to catalyze private investment, including around Project Polaris, underscore the need to operationalize the PPP framework. - Additional priorities: - Strengthening management of CBI resources. - Continuing improvements to MTFF projections. - Clearing the backlog of audited government statements. ### Financial Sector and Non-Bank Vulnerabilities - Credit growth and non-bank vulnerabilities: - Accelerating system-wide credit growth and non-bank vulnerabilities call for careful monitoring. - Higher bank lending reflects a still-nascent reversal from long-subdued credit conditions, supported by ample liquidity and relatively strong asset quality in the region. - Credit unions: encouraging asset quality improvements, but ensuring loan loss provisions are sufficient and stepping up forbearance monitoring remain critical. - Insurance sector: enhancing monitoring of reinsurance conditions and local market pricing in the general insurance sector remains important. - AML/CFT: authorities are encouraged to maintain recent momentum in strengthening the AML/CFT framework. ### Structural Growth Foundations - Limited potential growth impact from Grenada’s FDI-driven tourism expansion highlights the need to strengthen domestic foundations of growth, including: - more closely coordinated efforts to facilitate local investment and business development, - enhancing locally offered tourism services and intersectoral linkages, - reducing goods trade frictions, and - strengthening the economy’s human capital and productivity underpinnings. - Infrastructure project decisions should continue to pay close attention to disaster resilience in alignment with the updated National Adaptation plan. ### Data and Institutional Capacity - Improving quality of economic data and institutional capacity is critical to support informed policymaking. - Data deficiencies noted: - common regional gaps in balance of payments coverage, - monitoring of large investment projects, - outdated CPI weights, and - missing GDP expenditure data. - Capacity constraints: - persistent staffing shortages and turnover warrant prioritized attention in alignment with the ongoing public sector functional review and staff regularization process. *Source: IMF staff appraisal and authorities’ views as presented in the supplied content.* ### 39. It is recommended that the next Article IV consultation with Grenada takes place on ### 1grdea2026001-source-pdf - 39. It is recommended that the next Article IV consultation with Grenada takes place on ### Recommendation - It is recommended that the next Article IV consultation with Grenada takes place on the standard 12-month cycle. ### Macro outlook and growth - GDP growth: Real GDP recorded the series 2020–2030 as: -13.8, 4.7, 7.3, 4.5, 3.3, 4.4, 3.2, 3.0, 2.9, 2.7, 2.7 (percent). - Nominal GDP (annual percent change): -14.0, 7.6, 9.1, 9.2, 4.4, 5.1, 4.3, 4.7, 4.9, 4.8, 4.8 (percent). - Consumer prices (end of period): -0.8, 1.9, 2.9, 2.2, 0.8, 0.3, 1.3, 1.6, 2.0, 2.0, 2.0 (percent). - Output gap (percent of potential GDP): -9.6, -7.4, -3.1, -1.4, -1.4, 0.0, -0.1, 0.0, 0.0, 0.0, 0.0 (percent). Findings from figures: - GDP growth has been among the strongest in the ECCU in the past decade. - Tourism moderated in 2025H1 after an exceptional 2024 and is in-line with ECCU peers. - Inflation has continued to moderate as fuel and food prices eased and has been among the lowest in the ECCU. ### External sector: balance, reserves, and capital flows Key indicators (2020–2030, selected years and shares): - Current account balance (millions USD): -168.1, -161.4, -148.4, -270.7, -294.9, -256.4, -249.5, -238.5, -242.3, -250.2, -259.1. - Current account (percent of GDP): -16.1, -14.4, -12.1, -20.3, -21.1, -17.5, -16.3, -14.9, -14.4, -14.2, -14.0. - Exports of goods and services (millions USD): 428.6, 537.9, 706.2, 828.9, 821.5, 870.4, 934.6, 1001.0, 1058.0, 1109.1, 1158.5. - Tourism (millions USD): 185.5, 232.4, 448.6, 639.2, 664.1, 681.4, 735.4, 793.0, 840.8, 882.6, 921.4. - Imports of goods and services (millions USD): 544.7, 621.9, 785.0, 925.2, 978.9, 985.4, 1028.9, 1080.5, 1134.0, 1186.4, 1235.1. - Capital account (millions USD): 78.7, 55.7, 47.6, 127.1, 251.4, 62.1, 45.2, 40.9, 45.9, 46.7, 48.9. - Financial account (millions USD): -74.8, -116.6, -88.3, -188.9, -23.7, -194.3, -204.3, -197.5, -196.4, -203.6, -210.3. - Foreign direct investment (millions USD): -163.9, -161.6, -153.2, -220.4, -168.1, -187.6, -195.1, -202.9, -202.7, -208.3, -215.3. - ECCB imputed reserves (millions USD): 290.9, 324.2, 352.6, 389.1, 410.2, 395.2, 377.0, 391.4, 395.5, 414.5, 421.9. - ECCB imputed reserves (months of imports): 5.6, 5.0, 4.6, 4.8, 5.0, 4.6, 4.2, 4.1, 4.0, 4.0, 3.9. - Gross external debt (percent of GDP): 92.5, 94.9, 93.2, 89.0, 83.8, 79.0, 76.6, 77.6, 77.8, 77.7, 77.5. Observations: - The current account is large but narrowed modestly in recent periods, supported by strong H1 tourism inflows in 2024–2025. - Goods exports fell in 2024 as food exports were negatively impacted by Hurricane Beryl. - The current account improvement in 2024 was financed with FDI and capital transfers, which remained high due to CBI inflows. - Over-financing from external private inflows, largely FDI, has contributed to rising reserves. - The real effective exchange rate continued to depreciate. ### Fiscal developments and public debt Selected fiscal measures (percent of GDP unless specified otherwise): - Total revenue and grants: 28.1, 31.6, 32.9, 36.6, 43.8, 32.1, 30.9, 30.5, 30.6, 30.4, 30.4. - Revenue: 24.5, 24.0, 26.1, 36.1, 43.2, 30.4, 30.0, 29.8, 29.8, 29.7, 29.7. - Tax revenue: 22.1, 20.6, 21.6, 23.5, 23.6, 23.5, 23.9, 23.9, 23.9, 23.9, 23.9. - Non-tax revenue (noting change in classification 2023 onward): 2.4, 3.4, 4.5, 12.6, 19.6, 6.8, 6.1, 6.0, 5.9, 5.7, 5.7. - Citizenship-by-Investment (CBI) program revenue (percent of GDP): shown in memorandum as 3.6, 4.0, 4.1, 12.7, 14.7, 4.4, 3.5, 3.5, 3.3, 3.2, 3.2. - Total expenditure and net lending: 32.7, 31.3, 32.0, 28.7, 37.1, 39.2, 36.2, 30.5, 30.5, 30.4, 30.1. - Current primary expenditure (percent of GDP): 21.1, 20.9, 20.0, 18.0, 21.8, 22.2, 21.9, 21.5, 21.4, 21.4, 21.5. - Capital expenditure and net lending: 9.6, 8.6, 10.3, 9.2, 12.0, 13.1, 12.6, 7.4, 7.6, 7.5, 7.4. - Primary balance (percent of GDP): -2.6, 2.1, 2.6, 9.4, 10.0, -3.2, -3.5, 1.5, 1.5, 1.5, 1.5. - Overall balance (percent of GDP): -4.5, 0.3, 0.9, 7.9, 6.7, -7.1, -5.3, 0.0, 0.0, 0.0, 0.3. - Central government debt (incl. guaranteed, percent of GDP): 71.4, 70.0, 63.2, 60.0, 58.7, 54.9, 52.8, 54.2, 55.2, 56.0, 56.1. - Public debt (incl. debt of SOEs and SBs, percent of GDP): 89.5, 86.6, 79.3, 74.5, 72.7, 68.3, 65.8, 66.8, 67.4, 67.8, 67.5. Fiscal observations: - Fiscal surpluses have been large over the past three years, in contrast to the ECCU average, supporting more rapid debt reduction. - Tax revenues remained constant in 2024 despite tax-relief after the hurricane; non-tax revenues rose driven by increased CBI revenue and a CCRIF insurance payout. - Primary spending rose in 2024 due to higher outlays on transfers and goods and services. - External interest payments surged in 2024 due to temporary CBI-related payments on restructured international bonds. - Capital spending for reconstruction surged in 2024 after the hurricane; however, the primary surplus increased due to the large non-tax revenues. ### Monetary and financial sector Key monetary aggregates and developments: - Broad money (M2) annual percent change: 9.1, 8.5, 9.9, 1.4, 8.4, 5.1, 4.3, 4.7, 4.9, 4.8, 4.7. - Credit to private sector (annual change): 3.1, 3.8, 2.1, 3.8, 10.4, 8.4, -5.3, 5.4, 5.4, 5.2, 5.1 (note: 2026 shows -5.3 in the main table; other series show positive growth thereafter). - Net foreign assets (millions EC$): 1,720.7, 1,919.1, 2,212.0, 2,405.0, 2,892.2, 2,631.2, 2,647.0, 2,729.8, 2,799.1, 2,914.3, 3,033.2. - Broad money (millions EC$): 2,658.8, 2,884.7, 3,170.0, 3,213.0, 3,484.1, 3,663.0, 3,822.2, 4,001.7, 4,199.6, 4,400.8, 4,609.9. - Credit to private sector (millions EC$): 1,674.5, 1,738.2, 1,775.0, 1,842.3, 2,033.5, 2,205.2, 2,322.9, 2,447.7, 2,579.6, 2,713.3, 2,851.8. Sector observations: - Credit unions, though smaller than banks, significantly broadened credit for households and small businesses, while bank credit growth has also recovered. - Recent bank credit growth was mostly driven by construction and real estate activities. - Banks have prudently kept a high level of provisioning and the financial system maintained ample liquidity. - Banks remain adequately capitalized broadly in line with the regional average. ### Key structural and social indicators (selected) - Rank in UNDP Human Development Index: 73 out of 189 countries (2023). - Infant mortality rate per '000 births (2021): 14.4. - Life expectancy at birth in years (2021): 75. - GDP per capita in US$ (2023): 10,449. - Population in millions (2023): 0.13. - Unemployment rate (2025 Q2): 10.8. - Poverty rate in percent of population (2019): 25. - Adult illiteracy rate in percent (2014): 1. *Source: Country authorities; ECCB; and IMF staff calculations and estimates.* ### Annex I. Risk Assessment Matrix ### Annex I. Risk Assessment Matrix ### Conjunctural Risks - Geopolitical Tensions (High / ST, MT) - Expected Impact: Medium. Higher inflation, eroding income, and dampening demand. Markets for energy, food, tourism, and financial markets might see unexpected volatility. - Recommended Response: Provide targeted transfers to the vulnerable. Gradually increase value-added of the tourism and diversify source markets over time. Vigilantly monitor the financial sector development in coordination with ECCB. - Escalating Trade Measures and Prolonged Uncertainty (High / ST) - Expected Impact: Medium. Higher inflation, eroding income, and widening trade deficits. Import prices from the U.S. may surge while goods and (tourism) services exports are adversely affected by higher tariffs and weaker global growth. - Recommended Response: Provide targeted support to the vulnerable. Explore cost-effective opportunities to diversify trading partner countries for both exports and imports as well as source markets for tourism, while reducing the contribution of local port and administrative frictions to trade-costs. - Commodity price volatility (High / ST) - Expected Impact: Medium. Eroding income, dampening demand, and widening fiscal and trade deficits. - Recommended Response: Provide targeted support to the vulnerable. Accelerate shift to renewables and improve the pass-through of price signals. Introduce a more symmetric, rules-based local gasoline price mechanism to smooth the fiscal impact. - Financial Market Volatility and Correction (High / ST) - Expected Impact: Medium. Adverse financial conditions may weaken bank balance sheets through overseas investment exposures and weigh on investment through indirect impact on local financing conditions and/or disruptions to FDI inflows. - Recommended Response: Ensure continued adequacy of loss-absorbing financial system buffers in conjunction with continued enhancement of financial system supervision in coordination with the ECCB. Support creation of local investment opportunities to reduce the economy’s investment-reliance on external FDI. - Decline in International Aid (High / ST) - Expected Impact: Low. Worsening fiscal and external positions. Although the economy’s dependence on international aid flows is limited, reduced availability could heighten fiscal and external financing risks in the event of extreme climate events. - Recommended Response: Provide targeted support to the vulnerable. Continue implementing the Disaster Resilience Strategy, improve infrastructure and post-disaster response, and maintain fiscal and external buffers. - Rising Social discontent (Medium / ST, MT) - Expected Impact: Medium. Exacerbate imbalances, slow growth, and trigger market repricing. - Recommended Response: Social policies need to continue supporting the most vulnerable population. ### Structural Risks - Climate Change (Medium / ST) - Expected Impact: High. Reduce capital stock, create scarring effects, and diminish financial sector’s capital base. - Recommended Response: Continue implementing the Disaster Resilience Strategy, improve infrastructure and post-disaster response, maintain adequate fiscal buffers and strengthen oversight and data collection to support assessment of systemic financial implications from the insurance sector. - Cyberthreats (High / ST, MT) - Expected Impact: Low. Payment and financial system may be disrupted. - Recommended Response: Enhance digital security in public and private platforms, raise the public awareness, and prepare a contingency plan. ### Domestic Risks - Fiscal underperformance, lower than expected/mismanaged CBI revenues, and reputational risks (Medium / ST, MT) - Expected Impact: Medium. Lower investor confidence and growth performance and raised financing costs. - Recommended Response: Improve the CBI management framework to minimize the impact of CBI flow uncertainty on budget planning. Rationalize spending and broaden the revenue base from non-CBI sources. Strengthen governance frameworks to enhance the transparency and integrity of the CBI program, including via the management of resources. - Deterioration in CU asset quality and/or disruption of correspondent bank relationships (Low / ST, MT) - Expected Impact: Medium. Weaker growth and lower financial inclusiveness. - Recommended Response: Enhance CU balance sheets by accelerating reforms to resolve NPLs and improve credit access for households and firms. Monitor asset quality and ensure adequate loan loss provisioning. - Efficient implementation of major investment projects (e.g., Project Polaris hospital) (Medium / MT) - Expected Impact: Medium. Higher growth. - Recommended Response: Stronger investment and expansion into new niche markets like health tourism exports would support improved and more sustained growth outcomes. ### Key Immediate Policy Actions (Consolidated) - Provide targeted transfers/support to vulnerable households across shocks. - Diversify tourism source markets and increase tourism value-added. - Accelerate renewable energy transition and implement symmetric, rules-based gasoline price mechanism. - Strengthen financial supervision and maintain loss-absorbing buffers in coordination with the ECCB. - Improve CBI program governance and broaden non-CBI revenue base. - Continue Disaster Resilience Strategy implementation and enhance post-disaster response capacity. - Enhance digital security and contingency planning. --- ### Annex II. External Sector Assessment ### Overall Assessment and Uncertainty - Overall Assessment: Grenada’s estimated external position in 2024 was weaker than the level implied by medium-term fundamentals and desirable policies. - Data caveats: Assessment subject to considerable uncertainty given pending release of final 2024 BoP data in early 2026, history of material data revisions, incomplete reconciliation of FDI and current account flows with CBI investment data, pending verifications of some service and secondary income account outflows, discrepancies in domestic import statistics and partner-country mirror data, and gaps in tourism visitor expenditure surveys. ### Foreign Assets and Liabilities: Position and Trajectory - Background: Net international investment position (IIP) decreased from -143 percent of GDP in 2022 to -146 percent of GDP in 2023 (as of data revised at end-2024, the 2024 IIP data will be released in early 2026). - Asset/liability composition in 2023: - Gross assets decreased by 4.4 percentage points. - Gross liabilities saw a smaller decline of 1.8 percentages points. - Most assets: commercial banks’ overseas portfolio investment (38 percent of total assets), currency and deposits (17 percent of total assets), reserve assets (26 percent of total assets). - Liabilities: FDI (64 percent of liabilities) and other investment (33 percent of liabilities, mostly government loans). - Assessment: Level of NIIP in 2023 does not constitute a significant concern for external debt sustainability. Projected narrowing of the current account deficit in the medium term will help improve the NIIP. Large share of FDI and general government loans in total liabilities mitigates potential risks and is expected to persist. - 2023 (% GDP) snapshot: - NIIP: -145.5 - Gross Assets: 114.0 - Debt Assets: 69.5 - Gross Liabilities: 259.5 - Debt Liabilities: 100.6 ### Current Account - Background: - Current account deficit estimated to have widened modestly to 21.1 percent of GDP in 2024 from 20.3 percent of GDP in 2023, after widening sharply by 8.2 percent of GDP in 2023 from the previous year. - 2023 deterioration driven by increase in agent fee outflows related to the 2023-24 surge in CBI investment inflows and increases in primary and secondary income payments. - 2024 widened by temporary impact of Hurricane Beryl (higher import needs for food, relief supplies, construction materials, and lower agricultural exports), despite improvement in income balance including foreign aid transfers in kind. - 2025 projection: current account deficit projected to narrow to 17½ percent of GDP, as improvement in services trade balance from normalization of CBI investment inflows and associated commission payments more than offsets construction import driven deterioration in goods trade balance. - Assessment: - Cyclically adjusted 2024 CA estimated at -14.6 percent of GDP (accounting for cyclical contributions and temporary impacts). - 2024 EBA-lite CA norm: -10.8 percent of GDP. - Estimated CA gap: -3.9 percent of GDP. - Large negative current account norm reflects ratio of stock of outward migrants relative to domestic population and level of GDP per capita relative to world average. - Sizeable relative policy gap largely explained by significant primary fiscal surplus in 2024. - External position expected to gradually improve over medium term with normalization of CBI related outflows from 2025 and supported by robust tourism sector; further improvement expected beyond medium term once import pressures from high public investment outlays abate. - EBA-lite Model Results, 2024 (selected figures, in percent of GDP) - CA-Actual (est.): -21.1 - Cyclical contributions (from model) (-): 0.0 - Additional temporary/statistical factors (-): -7.4 - Natural disasters and conflicts (-): 0.9 - Adjusted CA: -14.6 - CA Norm (from model): -10.8 - Adjusted CA Norm: -10.8 - CA Gap: -3.9 - o/w Relative policy gap: 5.7 - Elasticity: -0.4 - REER Gap (in percent): 9.8 (CA model) and -5.1 (REER model) ### Real Exchange Rate - Background: - In 2024, the REER depreciated by 2.1 percent; NEER appreciated by 0.5 percent over the same period. - As of July, both the REER and NEER depreciated by around 3 percent since end-2024. - Assessment: - REER gap: 9.8 percent (from EBA-Lite CA model with elasticity -0.4) — points to a moderate overvaluation of the EC$ for Grenada. - EBA-Lite REER model points to an undervaluation of 5.1 percent. - IMF staff assesses the 2024 midpoint REER overvaluation to be 9.1 percent of GDP. ### Capital and Financial Accounts: Flows and Policy Measures - Background: - Grenada has historically relied on FDI to finance the saving-investment imbalance, with net FDI averaging -15.8 percent of GDP between 2018-23. - Capital account averaged about 6 percent over the same period. - Inflows to the capital account estimated at 18 percent of GDP in 2024, largely due to direct CBI investment to the government (capital transfers). - FDI inflows in 2024 estimated at 11.8 percent of GDP following a 16.5 percent of GDP surge in 2023. - Surge in CBI inflows was offset by a sharp increase in other investment outflows, reflecting higher bank overseas investments in part due to increased liquidity from government CBI deposits. - Assessment: - Financing of elevated current accounts remains heavily dependent on FDI and CBI inflows. - CBI inflows materially tapered in 2025; their use for public and private investment (which has a large import component) would result in lower import financing needs. - Downside risks: tightening of global financial conditions (could incentivize further outward investment of banking system liquidity or disrupt tourism FDI inflows) and natural disasters (could deter private capital inflows). - Upside: strengthening of Grenada’s tourism product and potential for new niche tourism markets, including longer-term medical tourism around Project Polaris teaching hospital, could attract more FDI. ### FX Intervention and Reserves Level - Background: - As a member of the Eastern Caribbean Currency Union, the imputed reserves method is used as a proxy for net foreign assets held at the ECCB. - Estimated imputed reserves increased by 10 percent from 2022 to 2023, covering 4.8 months of imports. - Estimated imputed reserves are estimated to have increased temporarily by 5.5 percent in 2024, reflecting strong CBI inflows and post-disaster external financing, including a drawdown from Catastrophe Deferred Drawdown Option (CAT DDO) with the World Bank and an insurance payout from the Caribbean Catastrophe Risk Insurance Facility (CCRIF). - Assessment: Imputed reserves exceed the typical benchmark of three months of imports and are above the 20 percent of broad money benchmark. - Additional ECCB/Reserve data points: - The ECCB has the mandate to maintain a foreign exchange cover of 60 percent of total demand liabilities. - The reserve backing ratio as of April 2024 was 95.7 percent. ### Potential Policy Responses (consolidated from Annex II) - Fiscal policies should remain solidly anchored in longer-term sustainability, carefully managing increasing public investments and maintaining buffers against unexpected shocks. - Structural reforms: foster domestic enterprise development and investment, increase value added of the tourism sector, address labor market rigidities, accelerate renewable energy generation, and build resilience to natural disasters to support external rebalancing. --- ### Annex III. Sensitivity Analysis of External Shocks ### Overview - Focus: Two key risk transmission channels given Grenada’s external vulnerabilities: 1. Tourism arrival shock from global (source market) economic slowdown. 2. External cost-push shocks from higher global commodity prices and U.S. tariff measures feeding into inflation through higher import prices. - Conclusion: Grenada’s high export and import dependency makes it vulnerable to pronounced external shocks, but impact under more moderate scenarios corresponding to current global uncertainty levels are likely to be modest. ### Tourism Transmission Channel — Source Market GDP Risks - Context: Tourism is the major sector of Grenada’s economy. Advanced economies account for a large share of tourist arrivals: - US: 41 percent of recent stayover arrivals - UK: 12 percent of recent stayover arrivals - Canada: 7 percent of recent stayover arrivals - PPML estimation results (selected coefficients from the bilateral country panel gravity regression of tourist arrivals): - Bilateral distance (log): -1.43*** (standard error 0.05) - Common border: 0.65*** (standard error 0.10) - Common language: 0.67*** (standard error 0.12) - Colonial dependence: 0.45*** (standard error 0.16) - Bilateral REER (log): -0.27*** (standard error 0.08) - Source Country Real GDP (log): 0.81*** (standard error 0.12) - Interaction terms (selected): - Source Country Real GDP (log) X Caricom destination dummy: -0.10** (standard error 0.04) / -0.10*** (standard error 0.03) across specifications - Source Country Real GDP (log) X US source dummy: 1.04* (standard error 0.58) - Model fit and data: - Observations range: 119,872–124,083 - Pseudo R-squared: 0.94 - Estimator: PPML; robust standard errors clustered at source-destination country-pair level. - Significance legend: *** 1 percent; ** 5 percent; * 10 percent. - Implication: Source country real GDP has a strong positive elasticity with bilateral tourist arrivals, indicating that source-market GDP shocks can materially affect tourism arrivals and thus Grenada’s external sector. *Source: Annex I. Risk Assessment Matrix; Annex II. External Sector Assessment; Annex III. Sensitivity Analysis of External Shocks (1grdea2026001-source-pdf).* ### Annex III. Figure 1. Grenada: Estimating the tourism ### Annex III. Figure 1. Grenada: Estimating the tourism elasticity ### Methodology & Elasticity Estimates - Estimation uses global bilateral panel tourism data from UNWTO with a PPML estimator and a gravity-type specification. - Explanatory variable of interest: source-country time-varying GDP; controls: destination-year fixed effects to capture Grenada-specific pull factors. - Average sample countries’ estimated elasticity of tourist arrivals to source-country GDP growth: 0.81. - Caribbean (CARICOM) country-specific elasticity (interaction term): 0.71. - US-specific elasticity: 1.8. - Benchmark elasticity applied (after adjusting for US share of tourists): 1.2. ### Impact on Tourism Receipts and GDP from Source GDP Shock - Scenario: one percent decline in source countries’ GDP. - Resulting decline in stayover arrivals (using elasticity 1.2): 1.2 percent. - Estimated loss in tourism receipts: EC$21 million. - Equivalent effect on exports and current account balance: 0.34 percentage points of GDP decline. - Estimated reduction in real GDP growth relative to baseline: 0.12 percentage points. - Interpretation: modest sensitivity to moderate source market GDP declines, with potential for non-linear amplification in more severe global crisis scenarios. ### Inflation Risks Through the Import Channel - Grenada’s consumption basket is sensitive to global commodity price fluctuations, notably fuel and food. - A moderate 10 percent positive shock to global food prices: expected to raise headline CPI inflation by 0.15 percentage points. - A moderate 10 percent positive shock to global fuel prices: expected to raise headline CPI inflation by 0.18 percentage points. - Headline inflation currently low, and historically external price shocks had limited second-round impact on core inflation (example: 2022 commodity price increases did not materially affect Grenada’s core inflation). ### Trade Policy Uncertainties and Indirect Transmission Channels - US is a significant import source and re-export hub for Eastern Caribbean imports; announced US tariff policies are incorporated in baseline via US inflation channel using WEO projections. - Indirect inflationary effects may arise if US tariff policies pass through to re-exported goods to the Caribbean depending on re-export arrangements. - Forthcoming port entry fees on Chinese operated or built vessels from October 14, 2025 may create similar indirect inflationary channels; the policy includes carve-outs for direct shipping services between US domestic ports and Caribbean islands. - Data limitations hinder precise quantification: - No evidence so far (based on US export data through end-August 2025) of statistically significant export price inflation to Grenada. - Available import source-country data for Grenada does not cleanly delineate re-exported goods. - Prevalence of logistical arrangements at US re-export hubs (which affect tariff pass-through) is not known. - Grenada’s outdated CPI weights preclude precise estimation of import content. ### Quantitative Scenarios and Estimates on Inflationary Impact - Hypothetical 50 percent increase in shipping costs (calibrated to comparable COVID-19 supply-chain shock): - Estimated increase in average CIF import price: around 2 percent. - Staff assessment: imports account for 15 percent of Grenada’s core (non-food and fuel) CPI basket. - Implied increase in core CPI inflation: 0.3 percentage points. - Hypothetical effective tariff increase of 8 percentage points on U.S.-sourced imports (under assumption that half of Grenada’s imports from the U.S., reportedly around 40 percent of total imports, are insulated from tariffs through re-exports): - Under similar import-content assumptions, affected share of core CPI basket: roughly 3 percent. - Potential maximum increase in core CPI inflation: 0.24 percentage points. - Since February 2025, the weighted average effective tariff rate in the U.S. has increased by around 8 percentage points. ### Caveats, Assessment, and Implications - Individual inflationary risk channels are assessed as having relatively modest near-term impact on Grenada’s inflation outcomes and effects are expected to be transitory. - Potential for compound effects if multiple risks materialize jointly; more severe global crises could non-linearly amplify tourism transmission and macroeconomic impacts (e.g., wealth and employment effects in source markets). - Mitigating factors noted: - Historical limited second-round impacts on core inflation from external shocks. - Currently low level of headline inflation. - Government response measures (e.g., gasoline retail pricing rules and temporary tax adjustments) can attenuate pass-through to domestic retail prices. *Source: Annex III. Figure 1. Grenada: Estimating the tourism elasticity (PPML estimator using global bilateral panel data).* ### introduction of unemployment insurance in 2023 is ### 1grdea2026001-source-pdf - introduction of unemployment insurance in 2023 is ### Labor market reforms and employment services - Introduction of unemployment insurance in 2023 is expected to help shorten notice periods, thereby enhancing labor market flexibility. - Enhanced training and job matching remain work in progress. - Authorities have recently partnered with ILO to set up a Public Employment Services Agency to provide comprehensive employment services, including: - maintaining a register of employers seeking workers and workers seeking employment. ### Renewable energy transition - Accelerate transition to renewable energy: Work in progress. - Measures and developments: - Authorities have introduced incentives for adoption of electric vehicles. - Authorities are working to expand solar energy production, but the share of electricity from renewables remains very low. - Authorities are exploring an initiative to transform Sargassum seaweed into renewable energy and fertilizer in collaboration with the European Union. ### Data collection and statistical capacity - Improve data collection: Mixed. - Developments: - The labor force survey was resumed. - The 2022 census and updated CPI weights are yet to be released. - Work on improving external sector statistics is supported by ongoing CARTAC technical assistance. - Constraints: - Capacity constraints delay progress in enhancing frequency, quality, and timeliness of data. ### Data adequacy assessment (Annex VI) — summary findings - Overall assessment: Data has some shortcomings that somewhat hamper surveillance. - Main gaps: national accounts, prices, and external sector statistics. - Mitigating supporting data available: - labor force survey, - detailed CBI revenue data, - high frequency indicators of economic activity, - Survey of Living Conditions and Household Budget Survey. - Specific issues: - Real GDP output data available at annual frequency with significant delays; weights last updated in 2006. - GDP expenditure data is not available. - Monthly CPI data published via the ECCB in a timely manner, but the basket/weights are outdated. - Lack of systematic supply-use tables and Tourism Satellite Accounts (TSA) hampers assessment of domestic value added, especially from tourism. - External sector data available only on an annual basis with a one-year delay; interim estimates subject to substantial revisions. - Errors and omissions are periodically sizeable; incomplete reconciliation of FDI inflows with CBI investment data creates potential inaccuracies. - Recording of travel exports based on a small tourist survey with gaps in cruise and growing yachting sectors. - Sizeable discrepancies in domestic import statistics and partner-country mirror data, particularly for fuel imports. - Fiscal and monetary/banking data coverage broadly adequate; public debt coverage expanded to include non-guaranteed SOE liabilities and PPPs. - Monetary surveys exclude non-bank depository institutions; surveillance receives necessary data from GARFIN. - Granularity of non-bank financial soundness data needs improvement. - Changes since last Article IV consultation: - Fiscal data was disseminated in a less timely manner during 2025. - External sector statistics for 2023 were subject to large revisions and net errors and omissions; 2024 data remains subject to high uncertainty due to a year-long delay in final data dissemination. - Newly incorporated CBI commission estimates affect service debits under the CA. - CARTAC assistance to ECCU countries continues to strengthen compilation frameworks and improve business and visitor expenditure surveys. - Improvements made in establishing TSAs in a World Bank–supported project. ### Corrective actions and capacity development priorities - Immediate priorities: - Release the Census and updated CPI weights. - Disseminate statistics via the CSO's website. - Continued needs: - Continued CARTAC TA support on the ESS to address trade, tourism, FDI, and CBI data issues. - Strengthen non-banking system data collection in line with recommendations from CARTAC TA on implementing risk-based supervision. - Address staffing constraints and staff turnover at the CSO to support corrective actions and TA absorption. - Other data gaps: - Data on the capital stock, particularly real estate market data, to assess natural disaster-related risks. - Improve quality of high-frequency agricultural production indicators. - Enhanced supervisory data on reinsurance and other soundness indicators to strengthen assessment of risks in the private insurance sector. ### Data standards and dissemination - Grenada participates in the Enhanced General Data Dissemination System (e-GDDS) and first posted its metadata in March 2001 but is yet to disseminate the data recommended under the e-GDDS. - Table of Common Indicators Required for Surveillance reported as of December 5, 2025. ### Small State Engagement Strategy (SSES) and Capacity Development (Annex VII) — strategic priorities - SSES time horizon: three-year plan for 2026-28 to help Grenada boost economic growth, achieve fiscal sustainability goals, and improve disaster resilience and energy security. - SSES instruments: IMF surveillance and tailored capacity development (CD). - Context: - Government’s “Vision 75” introduced in 2024, building on the National Sustainable Development Plan (NSDP) 2020-2035. - NSDP and Vision 75 outline five key pillars: (i) achieving energy independence and resilience; (ii) modernizing agriculture and enhancing food security; (iii) strengthening the healthcare system; (iv) empowering citizens through better education and skills training; and (v) safeguarding the environment. - NSDP proposes establishing a Sustainable Development Institute (SDI) and contains 217 strategic actions across eight national outcomes. - Implementation challenges stem from coordination gaps, institutional capacity constraints, weaknesses in statistical systems, project management, and cross-ministerial coordination. - Implementation emphasis on the "Five C's" of implementation: Coordination, Clarity, Capacity, Cash, and Commitment. ### IMF engagement focus areas and partner coordination - Fund priorities: - Fiscal and debt sustainability: - Priority: timely post-disaster return to fiscal rules to support achievement of the 60 percent of GDP debt target under Grenada’s fiscal rules framework, while preserving space for planned investment projects. - CD to improve SOE oversight, monitoring, and reporting. - Consider expanding the primary balance rule to cover government off-budget and public on-lending-financed investments. - Boost domestic revenue by broadening the tax base and rationalizing environmental taxation. - Enhance PFM operations and complete ongoing public sector reforms. - Develop a transparent framework for the use of CBI funds and closer integration with the debt management strategy. - Strengthen public investment management and operational capacity. - Financial stability and intermediation: - Focus on non-financial sector, particularly credit unions and the insurance sector. - Engage regionally with the ECCB to strengthen banking supervision and regional institutional reforms. - Strong and inclusive growth: - Examine constraints to structural growth and suggest policy tools to boost potential growth. - Recent Fund contributions: assessment of labor markets and renewable energy transition (2024); assessments of growth accounting and the role of FDI in capital development (2025). - Potential focus: tourism benefits, support for local investment and MSME development, productivity gains from digitalization, trade networks and barriers. - Natural disaster resilience and energy security: - Continue DRS implementation and post-disaster financing framework. - Continue investment in disaster-resilient infrastructure and reduce dependence on imported energy. - SSES will prioritize disaster risk management and climate financing, leveraging expertise in environmental taxation and PPP frameworks. - Coordination with development partners: - World Bank CD pillars: energy, domestic revenue mobilization, the financial sector, disaster resilience, health, and digital transformation. - CDB CD pillars: human and social development, economic competitiveness with climate-resilient infrastructure, and environmental sustainability and security. - Examples of partner support: renewable energy infrastructure investment support; domestic revenue enhancement; strengthened banking supervision; MSME financing access; support to MIT for project execution; environmental and social impact assessment support; online procurement training; transport and trade logistics study; CSO enhanced country poverty assessment project. ### IMF CD and TA support (selected chronology) - Historical breadth of TA includes public financial management, improving balance of payments statistics, tax administration, medium-term debt management strategy, managing the public wage bill, Improving GDP estimates by expenditure, developing producer price index methodology, balance of payments statistics, contingency planning for crisis preparedness and management, strengthening the fiscal responsibility law, compilation of supply and use tables, and sector-specific support for credit unions and insurance. - Selected mission dates in the record range from 01/11/2016 through 02/17/2020 (examples of missions listed in Annex VII, Table 1). *Source: 1grdea2026001-source-pdf - introduction of unemployment insurance in 2023 is (IMF PDF).* ### Annex VII. Table 1. Grenada: IMF CD and TA Support (continued) ### Annex VII. Table 1. Grenada: IMF CD and TA Support (continued) and DSA findings ### IMF CD and TA support (selected missions and dates) - 2/24/2020–2/28/2020: Strengthening Risk Management in Customs - 3/30/2020–4/24/2020: Strengthening Annual Balance of Payments Statistics (Remote Mission) - 6/22/2020–6/26/2020: Strengthening Program Development and Compliance Risk Management Framework - 2/8/2021–2/12/2021: Strengthening Balance of Payments/IIP Data (Remote Mission) - 3/22/2021–4/1/2021: Price Statistics (Consumer Prices) - 4/11/2021–4/24/2021: Compliance Risk Management Strategy for the Inland Revenue Division - 6/14/2021–6/18/2021: Developing Performance Targets and KPI - 7/19/2021–7/23/2021: Follow Up on Stress Test for Credit Unions - 1/31/2022–2/15/2022: Developing Performance Targets and KPI - 2/7/2022–2/11/2022: Developing Quarterly Balance of Payments Data (Remote Mission) - 4/6/2022–4/15/2022: Risk-based Supervision (Follow-up) - 2/21/2022–3/4/2022: Rebasing Annual and Quarterly GDP by Economic Activity to 2018 Prices - 4/1/2022–4/29/2022: Enhancing Compliance Risk Management - 4/18/2022–4/29/2022: Public Investment Management – PIMA and Climate PIMA - 5/17/2022–5/31/2022: Public Sector Pensions - 9/26/2022–10/7/2022: Review of Workload and Resource Allocation - 10/3/2022–10/7/2022: Improving Balance of Payments Source Data - 2/13/2023–2/17/2023: Risk-based Supervision (Follow-up) - LTX - 3/15/2023–3/19/2023: Risk-based Supervision and Credit Risk Management - 4/10/2023–4/25/2023: Fiscal Responsibility Law - 4/17/2023–4/28/2023: Strengthening Customs Control of Petroleum Imports - 5/2/2023–5/5/2023: CARTAC Systemic Risk Monitoring - 6/3/2023–6/14/2023: SIGTAS Data Diagnostic – Informing Data Migration Strategy - 6/14/2023–6/15/2023: Scoping Mission on Building Capacity in Macro-fiscal Forecasting - 9/4/2023–9/8/2023: External Sector Statistics - 10/2/2023–10/13/2023: Enhancing Data Integrity – Data Cleansing and Migration process - 1/15/2024–1/26/2024: Strengthen Oversight of State-owned Enterprises (SOEs) - 3/4/2024–3/8/2024: First Mission on Building Capacity in Macro-Fiscal Forecasting - 4/1/2024–4/15/2024: Support Measuring the VAT gap - 6/16/2024–8/31/2024: Strengthening Management / Governance Arrangements - SIGTAS - 8/26/2024–9/06/2024: Income Tax and Environmental Excise Reform - 9/23/2024–9/27/2024: Enhancing BOP/IIP Source Data - 1/27/25–1/31/2025: CARTAC GDP Rebasing - 3/17/2025–3/21/2025: National Accounts - 3/31/2025–4/11/2025: CARTAC Customs Administration - 5/26/2025–5/26/2025: Macro-Fiscal Policies (Climate Policy Assessment) - 5/26/2025–6/13/2025: CARTAC Tax Administration - 6/9/2025–6/13/2025: Macroeconomic Programming and Analysis - 9/29/2025–10/3/2025: External Sector Statistics - 10/6/2025–10/13/2025: Fiscal Risk Management of State-Owned Enterprises and Statutory Bodies - 10/27/2025–10/31/2025: Risk-based Non-Banking Supervision - 11/10/2025–11/14/2025: Macroeconomic Programming and Analysis ### Debt sustainability assessment — headline findings - Grenada remains in public debt distress solely on account of large and longstanding unresolved arrears to an official bilateral creditor of about US$38 million (2.7 percent of GDP) as of end-2024. - External and public debt are assessed as sustainable; Grenada has the capacity to meet current and future debt service obligations without requiring debt relief or accumulating additional arrears. - There is a one-off near-term breach of the debt-service-to-revenue threshold, reflecting temporarily elevated payments to holders of restructured international bonds. - The additional planned borrowing for Project Polaris, "close to 16 percent of 2024 GDP," would delay achievement of the Government’s 60 percent of GDP public debt target by four years, but would not result in breaches of the debt burden thresholds. - Anchored in Grenada’s fiscal rules framework, external and public debt are expected to return to a downward path, supported by continued GDP growth and a declining debt service burden underpinned by a high degree of concessional financing. - Gross public debt could rise significantly and persistently in more than one shock scenario, but government deposits from the recent Citizenship-by-Investment (CBI) revenue surge and tested contingency financing mechanisms would mitigate the risks. ### Public debt composition and coverage (selected figures) - Total Public Sector debt (incl. non-guaranteed SOE debt, A + B): 1014.5 (100.0) 72.7 (2024, stock; percent of GDP 72.7) - A. Public sector debt (excl. non-guaranteed SOE debt): 819.2 (80.8) 58.7 (2024) - Central government debt (end-2024): 819.2; 80.8; 58.7 (stock; percent of total; percent of GDP) - B. SOE non-guaranteed debt (end-2024): 195.3; 19.2; 14.0 - PetroCaribe Grenada (end-2024): 137.8; 13.6; 9.9 - Other SOE non-guaranteed debt (end-2024): 57.4; 5.7; 4.1 - External debt (A+B+C) (end-2024): 828.4; 81.7; 59.4 - Central government external debt (end-2024): 676.0; 66.6; 48.4 - Multilateral (end-2024): 449.8; 44.3; 32.2 - Official bilateral (end-2024): 116.2; 11.5; 8.3 - Commercial debt (end-2024): 107.0; 10.5; 7.7 - Domestic debt (end-2024): 186.1; 18.3; 13.3 - On-lent loans to public bodies (memorandum, end-2024): - External: 74.0; 5.3 (percent of GDP) - Domestic: 0.8; 0.1 (percent of GDP) - Nominal GDP (2024): 1395.5; 100.0 ### Contingent liabilities and calibration - The contingent liability stress test sets: - PPP capital stock shock at zero (PPP capital stock is zero). - Contingent liabilities from the domestic financial system at 5 percent of GDP (the minimum value). - Current stock of PPP capital and central bank debt borrowed on behalf of the government is zero; related contingent liability shock set to zero. - Rationale: 5 percent of GDP is the average cost to the government of a financial crisis in low-income countries since 1980. ### Recent dynamics, portfolio characteristics, and risks - External and total public debt have continued to decline following the muted impact of the 2024 Hurricane Beryl on Grenada’s debt dynamics. - Central government debt declined from 94.3 percent of GDP in 2014 to 58.5 percent of GDP in 2019; by end-2024 it reached 58.7 percent of GDP. - Hurricane Beryl economic damages estimated to exceed 16 percent of GDP; CBI revenues and post-disaster financing mitigated the impact on debt trajectory. - Composition shifted toward external concessional sources; non-guaranteed SOE and statutory bodies debt modestly declined to 14 percent in 2024 (from 15.5 percent in 2019). - Central government on-lending increased; on-lent debt rose from 1.1 percent of GDP in 2019 to 5.4 percent of GDP in 2024. - Unresolved arrears to Trinidad and Tobago of about US$38 million (2.7 percent of GDP) at end-2024 remain. - 2024 borrowing comprised committed undisbursed balances and concessional funding, including a US$20 million Catastrophe Deferred Drawdown option from the World Bank. - The second 2024 debt service payment to holders of the international bonds restructured in 2015 (outstanding amounts of US$70.2 million or 5 percent of GDP at end-2024) was deferred. - The contingent disaster clause allowed deferral of the November 12, 2024, and May 12, 2025 payments; the deferral provided temporary post-disaster liquidity of about US$12½ million, or about 1 percent of GDP. - Average time to maturity (ATM) for the total portfolio in 2024: 10.6 years. - Average effective interest rate on government debt rose from 2.7 percent to 8 percent (reflecting temporary contractual payments to international bondholders linked to prior exceptional CBI revenues). - Portfolio characteristics (end-2024): - 94 percent of the debt portfolio contracted at fixed interest rates. - Average time to re-fixing increased by 0.3 years to 10.2 years. - About 16 percent of the portfolio is subject to a change in interest rates in one year. - Foreign exchange risk modest: about two-thirds of foreign currency debt denominated in U.S. dollars. - Banking sector and financial risks: - NPLs: 2.9 percent of total loans and 1.8 percent of GDP at end-2024. - Credit union NPL ratio: 6.5 percent at end-2024. - Current contingent liability risks from the banking system assessed as low due to low NPLs and high system liquidity. ### Macroeconomic background and fiscal outcomes (selected indicators) - 2024 GDP growth (estimated): 3.3 percent. - Tourism: record year in 2024 driven by an exceptionally strong 2024 winter season. - Agriculture: post-hurricane drop in agricultural production slightly more severe than previously expected. - Inflation: remained moderate in the post-hurricane environment. - 2024 current account deficit: estimated to remain elevated as higher imports and service outflows offset strong tourism exports. - Fiscal outcome 2024: - Surge in citizenship-by-investment (CBI) revenues and a hurricane insurance payout resulted in a sizeable primary surplus of over 10 percent of GDP. - Government deposits rose to nearly 25 percent of GDP. *Source: Based on available TA reports and consultations with CARTAC; Grenadian authorities and Fund staff estimates; STAFF REPORT FOR THE 2025 ARTICLE IV CONSULTATION—DEBT SUSTAINABILITY ANALYSIS.* ### 9. Post-hurricane reconstruction and large public construction investments are projected ### 9. Post-hurricane reconstruction and large public construction investments are projected ### Near-term growth outlook and major projects - Real GDP growth is projected at 4.4 percent in 2025, supported by post-hurricane reconstruction and large public construction investments. - Project Polaris: a US$250 million teaching hospital with a projected 5-year construction phase commencing in 2026; supports gradually moderating growth through its construction phase. - Growth is projected to converge to its estimated long-term potential of 2.7 percent toward the end of the medium-term. - Tourism: another robust tourism year by historical standards is expected, but moderation in winter-season inflows weighs on its projected growth contribution; pending completion of FDI-financed projects to expand tourism capacity represents upside risk. ### Inflation, external accounts, and reserves - Inflation (GDP deflator, period average): 0.7 percent in 2025 and 1.1 percent in 2026 (projected), recovering to 2 percent from 2028 onward. - Non-interest current account deficit (Table entries, in percent of GDP): 17.5, 16.3, 14.9, 14.4, 14.2 (preserved as presented for projection years). - Growth of exports of G & S (USD terms, in percent): 6.0, 7.4, 7.1, 5.7, 4.4 (preserved as presented). - Gross (imputed) reserves are expected to see modest declines in 2025-28 as the current account deficit remains large; reserves are projected to remain around 4 months of imports over the medium term. ### Fiscal outlook, primary balance, and deposits - Primary balance projections (in percent of GDP, Table entries): -3.2, -3.5, 1.5, 1.5, 1.2 (preserved as presented). - The normalization of non-tax (CBI) revenues amid large reconstruction spending and other priority investments is projected to result in temporary primary deficits in 2025-26 of -3.2 percent and -3.5 percent of GDP, respectively, with the suspension of the fiscal rule extended into 2026. - Return to the primary balance rule is projected from 2027, targeting a 1.5 percent of GDP primary surplus from 2027 as reconstruction spending ends (authorities’ commitment). - The government’s deposits include a Contingency Fund account held at the ECCB; 10 percent of the NTF CBI receipts are transferred to the fund, which totaled $61.1m at October-2025. - Additional gross financing needs in 2025-26 are assumed to be met by a drawdown in government deposits, projected to decline to 8.6 percent of GDP by end-2026 from 25 percent in 2024; net of these deposits, public debt will remain close to or below the 60 percent threshold over the medium term. ### Project Polaris financing and fiscal treatment - Project financing assumptions (included in public debt): - Repurposing of an undrawn US$100 million concessional loan from the Saudi Fund for Development. - US$125 million of additional bilateral borrowing from other official development partners. - US$25 million of the project financed through government equity. - Project Polaris investments are planned to be executed off-budget through a public special purpose entity; on a consolidated basis, the Government is projected to run fiscal deficits through 2030 because of these off-budget investments. - The associated additional Government borrowing linked to Project Polaris is projected to postpone reaching the 60 percent public debt target until 2033. ### Debt strategy, financing mix, and market plans - New financing relies on external official concessional sources and utilization of undrawn commitments, incorporating World Bank IDA projections and existing CDB projects. - The debt strategy includes minimal new domestic or regional commercial borrowing in the near-term while rolling over maturing short-term instruments. - In the long run, government financing is assumed to continue to rely on external official loans, with no plan to return to external bond markets in the projection period. - Domestic and Regional Governments’ Securities Market (RGSM) financing sources fill financing needs not covered by external funding; the DSA assumes domestic and RGSM borrowing gradually turn to longer-term maturities in the outer projection period. ### Debt dynamics, stress tests, and classification - Public debt: - Public debt is projected to rise slightly until 2030 before declining in the baseline scenario; present value of debt-to-GDP remains below debt burden thresholds in the baseline. - On a consolidated basis including Project Polaris, government is projected to run fiscal deficits through 2030; excluding the Project Polaris borrowing, government debt is projected to decline with the 2027 return to the primary balance rule. - The medium-term public debt target of 60 percent of GDP is projected to be reached in 2033. - Risk classification: - Grenada continues to be assessed at medium debt-carrying capacity under the CI score; CI Score reported as 3.003 (components and weights presented in the source). - Public debt is assessed to be “in debt distress” solely on account of unresolved official arrears. - Stress-test outcomes and shocks: - A tailored “natural disaster” scenario applies a 5 percent of GDP, or 2.5 percentage points (whichever is higher), rise in debt in the first two years following a hurricane. - Export shock calibration: decline in exports of goods and services by 16 percent of GDP in 2025 and another 12.5 percent of GDP in 2026. - PV debt-to-GDP and debt-service-to-revenue thresholds are breached under stress tests; a one-time depreciation breached the debt-service-to-revenue threshold in 2025-26 only. - Under the most extreme growth-shock scenario, the benchmark threshold for the PV of debt-to-GDP ratio is breached for more than a decade. ### Risks, buffers, and policy implications - Risks tilted to the downside: - High exposure to natural disasters; Grenada remains highly exposed to further natural disaster risk. - High tourism and import dependence exposes Grenada to a material slowdown in tourism source markets and global commodity price volatility. - Uncertain outlook for CBI inflows amidst increased international scrutiny can weigh on future government revenue and tourism investment. - Potential amplification from shocks in the non-bank financial sector (notably credit unions). - Buffers and mitigating factors: - Government deposits from past CBI inflows provide an important buffer despite expected reductions in 2025-26. - Multi-layered disaster resilience framework (e.g., response to Hurricane Beryl) and contingent financing mechanisms provide quasi-automatic relief. - High share of official creditors in government external debt and absence of international market borrowing support external debt resilience. - Policy-relevant notes: - Publication of full SOE accounts, including financing, and/or a move to reporting consolidated general government accounts would reduce DSA residuals. - Enhancing coverage of the fiscal rules’ operational annual targets to better capture fiscal operations of statutory entities would strengthen fiscal discipline. - The low implied multiplier on government investment reflects large import content of construction investment and underscores the need for structural reforms to boost potential growth. *Source: Grenadian authorities and IMF staff projections (as presented in the provided content).* ### 25. Sizeable savings from past CBI revenues provide a buffer against external shocks. ### 25. Sizeable savings from past CBI revenues provide a buffer against external shocks. ### Debt sustainability and downside risks - Grenada’s debt sustainability is subject to downside risks, including: - susceptibility to global shocks on tourism and commodity prices; - highly uncertain CBI inflows amidst intensified international scrutiny; - the ever-present risk of natural disasters. - Fiscal policy prudence underpinned by the fiscal rules, a stronger CBI management framework, and structural reforms to improve competitiveness and support domestic investment opportunities are key to managing these risks. ### Buffers and financial protection - Savings accumulated from the recent CBI revenue surge provide a substantial buffer against external shocks. - Existing and tested financial instruments and assets contributing to resilience: - parametric insurance facilities (CCRIF); - other disaster contingent debt instruments, such as the WB’s Catastrophe Deferred Drawdown Option; - availability of other liquid financial assets (SDR allocation). - The DRS illustrative DGSE-based simulations (IMF Country report No. 22/80) indicate that, based on Grenada’s historical costs of natural disasters: - achieving a public capital stock that is 80 percent resilient would imply a steady state level of potential output that is 3 percent higher than without the investment in resilient infrastructure. - the dedicated financial protection against natural disasters amounted to 7¼ percent of GDP in 2020. - In staff’s baseline projections the growth benefits from DRS implementation are treated as an upside risk. ### Climate resilience and disaster risk management - Grenada is advancing climate resilience building to cushion the fiscal position from disaster-related risks. - Development partner support highlighted: - continued strong support from the World Bank and the Caribbean Development Bank; - Project Polaris would support strengthening the disaster-resilience of Grenada’s healthcare system. - Ongoing priorities: - mainstreaming resilience building across public investment; - continued implementation of the Disaster Resilience Strategy (DRS) as supported by the IMF, World Bank, and other development partners. - Further measures needed: - improvements to planning to coordinate public investment projects to maintain compliance with the fiscal rules framework; - timely publication of climate fiscal risk statements to better prepare for climate events; - improve efficiency of public investment and address persistent capacity constraints in public administration. - Development partners are providing technical and capacity assistance to advance these areas. ### Public financial management and debt management enhancements - Strengthening public financial management would further support long-term debt sustainability, including: - strengthening investment planning, monitoring and execution capacity in line with the 2022 PIMA/C-PIMA priority recommendations; - continued efforts to strengthen the Medium-Term Fiscal Framework (MTFF) to reinforce its role in the budget process and as top-down guidance for the macro-fiscal path; - enhanced monitoring of SOEs with development of relevant frameworks and regulations. - Debt management and debt data coverage reforms and progress: - adherence to a ceiling on non-concessional borrowing under the World Bank’s Sustainable Development Finance Policy since 2023; - implementation of reforms to improve publication of debt data including the annual debt management report and quarterly debt statistical bulletins, and coverage of data including SOE debt and publication of a MTFF. - Further recommended actions to improve debt management: - enhance data management and upgrade IT systems; - revise the debt management procedure manual and renew the 2018 Debt Management Performance Assessment (DeMPA) which was undertaken with the World Bank; - coordinate the debt management strategy and the CBI revenue management framework to help optimize costs from the Government’s net debt position; - manage all CBI resources under a unified framework and establish an asset management system for NTF assets; - timely publication of Central Government and expanded SOE financial statements, as well as publishing the NTF stock, to enhance transparency of the government’s fiscal position and operations. *GRENADA — INTERNATIONAL MONETARY FUND* ### 29. The authorities agreed with staff’s debt sustainability assessment. They indicated the ### 29. The authorities agreed with staff’s debt sustainability assessment. They indicated the ### Authorities’ positions and near-term financing - The authorities agreed with staff’s debt sustainability assessment. - Commitments and objectives: - Commitment to return to the fiscal rules from 2027 once expenditures for reconstruction activities are completed. - Commitment to meeting the 60 percent of GDP debt target by 2035 notwithstanding the additional Project Polaris borrowing. - Near-term reconstruction financing: - Will be covered by already contracted external funding, as well as drawdown of deposits. - Staff’s financing assumptions: - Staff's financing assumptions are broadly in line with the government's Medium Term Debt Management Strategy. ### Key public finance and Fund relations indicators (selected) - Quota: 16.40 - Fund Holdings of Currency: 15.23 - Reserve Tranche Position: 1.18 - Net Cumulative SDR Allocation: 26.88 - SDR Holdings: 2.63 - RCF Loans outstanding (noted in the table of outstanding purchases and loans): 14.76 - Latest RCF commitment (date of commitment shown): 04/28/20; Amount Drawn: 16.40 (SDR Million) - Overdue/projected Fund payments schedule (SDR Million): - Principal: 2025: 0.40; 2026: 4.28; 2027: 3.48; 2028: 3.28; 2029: 3.28 - Charges/Interest: 2026: 0.67; 2027: 0.67; 2028: 0.67; 2029: 0.67 - Total: 2025: 0.40; 2026: 4.95; 2027: 4.15; 2028: 3.95; 2029: 3.95 - Exchange rate arrangement: - Currency board; member of the Eastern Caribbean Currency Union (ECCU). - Peg: EC$2.70 per U.S. dollar since July 1976. ### Public and external debt framework — policy-relevant projections and indicators (high-level summary) - Authorities reaffirmed alignment with the staff DSA and the Medium Term Debt Management Strategy for financing assumptions. - Fiscal rule timeline: - Authorities intend to resume adherence to fiscal rules from 2027 after reconstruction spending subsides. - Debt target: - Authorities intend to reach 60 percent of GDP public debt by 2035. ### Stress tests, sensitivity analyses, and risks (high-level) - The DSA includes a range of stress tests and sensitivity analyses (growth, primary balance, exports, depreciation, combined shocks, natural disaster, and contingent liabilities). - Stress-testing approach highlights: - The “most extreme shock” is identified as the test that yields the highest ratio in or before 2035. - Additional financing needs generated by shocks under the stress tests are assumed to be covered by PPG external MLT debt in the external DSA. - Benchmarks and thresholds are applied to indicators such as: - PV of Debt-to-GDP Ratio - PV of Debt-to-Exports Ratio - Debt Service-to-Revenue Ratio - Debt Service-to-Exports Ratio ### Technical assistance and institutional support relevant to fiscal and debt management - Significant and ongoing TA from CARTAC and IMF across multiple areas that support medium-term debt sustainability: - Public Financial Management (PFM): reforms to SOEs and statutory bodies, cash forecasting and commitment control, transition to GFSM 2014 and IPSAS, Public Investment Management Assessment (with a climate module), pension sustainability advice, and Fiscal Responsibility Act revision work. - Tax Administration: establishment of a Large and Medium Taxpayer Unit; IT-enabled business model (GTAX migration); analytical capacity and risk management for Customs; environmental taxation of vehicles; leadership and management capacity building for Grenada Customs and Excise Division. - Financial Stability Supervision and Regulation: TA to Grenada Authority for the Regulation of Financial Institutions (GARFIN) on risk-based supervision, stress testing, and credit-union supervision; October 2025 support on credit-union credit risk management. - Macroeconomic Framework and Statistics: TA on GDP rebasing to 2018 prices, supply and use tables, Producer Price Index, CPI update, BPM6-compliant BOP and IIP statistics, and capacity building to address data compilation issues including direct investment and Citizenship by Investment program recording. - Other FAD/LEG support: tax policy and administration, PFM legislation drafting, public expenditure rationalization, and public wage bill reform. *Source: IMF staff report and accompanying debt sustainability analysis materials included in the provided content.* ### 2015. In 2025, FAD provided training on the Climate Policy Assessment Tool. ### 1grdea2026001-source-pdf - 2015. In 2025, FAD provided training on the Climate Policy Assessment Tool. ### Overview - Chronological record of IMF technical assistance (TA) and training missions for Grenada (selected entries). - Entries list Start Date, End Date, and Mission Description as provided in source material. - Source note: "Based on available TA reports and consultations with CARTAC." ### Mission timeline (selected entries) - 01/11/2016 — 01/15/2016: Public Financial Management - 03/21/2016 — 03/25/2016: Improving Balance of Payments Statistics - 04/18/2016 — 04/22/2016: Tax Administration - 06/09/2016 — 06/17/2016: Improving External Sector Statistics - 06/09/2016 — 06/17/2016: Medium-Term Debt Management Strategy - 07/06/2016 — 07/19/2016: Managing the Public Wage Bill - 08/15/2016 — 08/26/2016: Improving GDP Estimates by Expenditure - 4/24/2017 — 4/28/2017: Developing Methodology for New Producer Price Index - 7/24/2017 — 7/28/2017: Balance of Payments Statistics - 9/18/2017 — 9/22/2017: Review and Assessment of the Adequacy of Reinsurance Contracts/Treaties - 10/23/2017 — 10/27/2017: Developing a Stress Testing Framework for Credit Union Sector - 11/13/2017 — 11/24/2017: Improving Annual & Quarterly GDP Methodology - 11/27/2017 — 12/1/2017: Risk-Focused Examinations of Retail Lending Portfolios at Credit Union - 4/16/2018 — 4/20/2018: Strengthening BOP & New IIP - 4/23/2018 — 4/27/2018: Developing Financial Health and Stability Indicators for the Insurance Sector - 4/24/2018 — 5/2/2018: Revenue Administration Diagnostic Mission ### Missions and activities (2018–2021) - 5/29/2018 — 5/30/2018: Review of Tax Administration Reform Priorities and FAD Recommendations - 10/8/2018 — 10/12/2018: Contingency Planning for Crisis Preparedness and Management - 1/30/2019 — 2/11/2019: Strengthening the Fiscal Responsibility Law - 2/11/2019 — 2/15/2019: Improving External Sector Statistics - 4/1/2019 — 4/12/2019: Improving Source Data and Compilation Methodologies Used for GDP Estimates - 2/17/2020 — 2/28/2020: Compilation of Supply and Use Tables - 2/24/2020 — 2/28/2020: Strengthening Risk Management in Customs - 3/30/2020 — 4/24/2020: Strengthening Annual Balance of Payments Statistics (Remote Mission) - 6/22/2020 — 6/26/2020: Strengthening Program Development and Compliance Risk Management Framework - 2/8/2021 — 2/12/2021: Strengthening Balance of Payments/IIP Data (Remote Mission) - 3/22/2021 — 4/1/2021: Price Statistics (Consumer Prices) - 4/11/2021 — 4/24/2021: Compliance Risk Management Strategy for the Inland Revenue Division - 6/14/2021 — 6/18/2021: Developing Performance Targets and KPI - 7/19/2021 — 7/23/2021: Follow Up on Stress Test for Credit Unions ### Missions and activities (2022–mid 2024) - 1/31/2022 — 2/15/2022: Developing Performance Targets and KPI - 2/7/2022 — 2/11/2022: Developing Quarterly Balance of Payments Data (Remote Mission) - 4/6/2022 — 4/15/2022: Risk-based Supervision (Follow-up) - 2/21/2022 — 3/4/2022: Rebasing Annual and Quarterly GDP by Economic Activity to 2018 Prices - 4/1/2022 — 4/29/2022: Enhancing Compliance Risk Management - 4/18/2022 — 4/29/2022: Public Investment Management – PIMA and Climate PIMA - 5/17/2022 — 5/31/2022: Public Sector Pensions - 9/26/2022 — 10/7/2022: Review of Workload and Resource Allocation - 10/3/2022 — 10/7/2022: Improving Balance of Payments Source Data - 2/13/2023 — 2/17/2023: Risk-based Supervision (Follow-up) - LTX - 3/15/2023 — 3/19/2023: Risk-based Supervision and Credit Risk Management - 4/10/2023 — 4/25/2023: Fiscal Responsibility Law ### Missions and activities (2023–2025) - 4/17/2023 — 4/28/2023: Strengthening Customs Control of Petroleum Imports - 5/2/2023 — 5/5/2023: CARTAC Systemic Risk Monitoring - 6/3/2023 — 6/14/2023: SIGTAS Data Diagnostic – Informing Data Migration Strategy - 6/14/2023 — 6/15/2023: Scoping Mission on Building Capacity in Macro-fiscal Forecasting - 9/4/2023 — 9/8/2023: External Sector Statistics - 10/2/2023 — 10/13/2023: Enhancing Data Integrity – Data Cleansing and Migration process - 1/15/2024 — 1/26/2024: Strengthen Oversight of State-owned Enterprises (SOEs) - 3/4/2024 — 3/8/2024: First Mission on Building Capacity in Macro-Fiscal Forecasting - 4/1/2024 — 4/15/2024: Support Measuring the VAT gap - 6/16/2024 — 8/31/2024: Strengthening Management / Governance Arrangements - SIGTAS - 8/26/2024 — 9/06/2024: Income Tax and Environmental Excise Reform - 9/23/2024 — 9/27/2024: Enhancing BOP/IIP Source Data - 1/27/25 — 1/31/2025: CARTAC GDP Rebasing - 3/17/2025 — 3/21/2025: National Accounts - 3/31/2025 — 4/11/2025: CARTAC Customs Administration - 5/26/2025 — 5/26/2025: Macro-Fiscal Policies (Climate Policy Assessment) - 5/26/2025 — 6/13/2025: CARTAC Tax Administration - 6/9/2025 — 6/13/2025: Macroeconomic Programming and Analysis - 9/29/2025 — 10/3/2025: External Sector Statistics - 10/6/2025 — 10/13/2025: Fiscal Risk Management of State-Owned Enterprises and Statutory Bodies - 10/27/2025 — 10/31/2025: Risk-based Non-Banking Supervision - 11/10/2025 — 11/14/2025: Macroeconomic Programming and Analysis ### Notable program participation and relations - FSAP Participation: Grenada participated in the regional Eastern Caribbean Currency Union FSAP conducted in September and October 2003. The Financial System Stability Assessment is IMF Country Report No. 04/293. - Relations with other international financial institutions (As of December 2, 2025): - World Bank (WB) - Caribbean Development Bank (CDB) *Source: Based on available TA reports and consultations with CARTAC.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2026/english/1grdea2026001-source-pdf.pdf_