{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with Grenada",
  "publication": "IMF News, May 10, 2022",
  "sourceUrl": "https://www.imf.org/en/news/articles/2022/05/10/pr22147-grenada-imf-executive-board-concludes-2022-article-iv-consultation-with-grenada",
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  "summary": "IMF Executive Board Concludes 2022 Article IV Consultation with Grenada",
  "publishDate": "2022-05-10",
  "sections": [
    {
      "heading": "Pandemic impact and recent developments",
      "content": "- Tourism-dependent economy: real output declined by 14 percent in 2020.\n- Growth: 2021 estimated at 5.6 percent, driven by construction and agriculture.\n- Policy response: containment measures, increased health and social spending, expanded public investment program.\n- Fiscal and external consequences: central government debt rose and the current account deficit widened.\n- Financial sector: has so far weathered the crisis well.\n- Government priorities: seeking international support to implement Disaster Resilience Strategy and transition towards renewable energy."
    },
    {
      "heading": "Near-term outlook and risks",
      "content": "- Growth projection: 3.6 percent in 2022 on construction activity, gradual pickup in tourist arrivals, and recovery in offshore education.\n- War in Ukraine: affects Grenada primarily through higher commodity prices and is a significant headwind.\n- Major risks: a further rise in global commodity prices (potentially increasing inflation) and a more prolonged pandemic with implications for tourism recovery."
    },
    {
      "heading": "Executive Board assessment and policy guidance",
      "content": "- Commendation: authorities’ timely response to the pandemic, facilitated by past fiscal prudence.\n- Immediate priorities emphasized by Directors:\n  - Accelerate vaccination.\n  - Provide time-bound fiscal support for the most vulnerable.\n- Medium-term priorities:\n  - Implement reforms to build resilience to climate change.\n  - Increase economic diversification to promote higher and more inclusive long-term growth.\n- Fiscal framework:\n  - Triggering the escape clause under the fiscal responsibility framework (FRF) for the third time was judged appropriate given the economic situation.\n  - Directors encouraged a timely return to fiscal rules and a strengthening of the FRF over time—supported by Fund technical assistance—to underpin fiscal credibility and debt sustainability.\n  - Importance of securing concessional financing and mobilizing domestic resources to finance resilience-building investments; welcome for efforts to increase spending efficiency and transparency.\n  - Note on fiscal risks: recent court ruling on public pensions could pose potential fiscal risks; need to ensure pension system sustainability.\n- Financial sector recommendations:\n  - Monitor asset quality closely as loan moratoria and regulatory forbearance expire.\n  - Increase provisioning and strengthen supervisory oversight of credit unions.\n  - Further strengthen the AML/CFT framework to help maintain correspondent banking relationships.\n- Structural recommendations to boost competitiveness and growth:\n  - Increase value-added in tourism through deeper linkages across sectors.\n  - Diversify tourism sources.\n  - Improve cost competitiveness.\n  - Address long-standing labor skills mismatches."
    },
    {
      "heading": "Selected economic and financial indicators (as presented)",
      "content": "- Human development and social indicators:\n  - Rank in UNDP Human Development Index: 74 (out of 189 countries, 2020)\n  - Infant mortality rate (2019, per 1000): 14.7\n  - Adult illiteracy rate in percent (2014): 1\n  - Life expectancy at birth in years (2020): 72\n  - Poverty rate in percent of population (2019): 25\n  - GDP per capita in US$ (2020): 9,680\n  - Population in millions (2018): 0.11\n  - Unemployment rate (2021 Q2): 17\n\n- National income and prices (selected years: 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027)\n  - GDP at constant prices: 0.7; -13.8; 5.6; 3.6; 3.9; 3.5; 3.2; 2.8\n  - GDP deflator: 0.6; -0.7; 1.2; 3.1; 3.3; 1.8; 2.0; 2.2\n  - Consumer prices, end of period: 0.1; -0.8; 1.9; 5.4; 2.3\n  - Credit to private sector (end of period): 1.4; 3.8; 4.2; 3.4\n  - Broad money (M2): 2.9; 9.1; 8.5; 3.0\n\n- Central government balances (accrual) (percent of GDP, selected)\n  - Revenue and grants 1/: 26.6; 28.1; 31.8; 29.0; 29.6; 28.8; 28.2; 28.0\n  - Expenditure 2/: 21.6; 26.9; 31.5; 32.4; 27.9; 26.1; 25.7; 25.6\n  - o.w. Capital expenditure: 2.6; 8.6; 10.4; 6.9; 5.7; 4.6; 4.7\n  - Primary balance: 6.8; 2.1; -1.5; 4.3\n  - Overall balance: 5.0; 0.3; -3.4; 1.7; 2.4\n\n- Public debt (incl. guaranteed) (percent of GDP)\n  - Total: 58.5; 71.4; 70.3; 69.0; 66.5; 64.4; 58.9; 53.6; 48.6\n  - Domestic: 14.6; 16.2; 15.4; 15.3; 13.8; 12.5; 11.4; 9.6; 8.0\n  - External: 44.0; 55.2; 54.9; 53.8; 52.7; 51.8; 47.6; 40.6; 36.0\n\n- Savings-Investment balance (percent of GDP)\n  - Balance: -14.6; -21.0; -24.5; -27.9; -20.6; -15.4; -13.6; -12.9; -12.4\n  - Savings: 9.8; 4.5; 8.9; 10.1\n  - Investment: 24.4; 25.2; 25.0; 23.8; 24.3; 24.9\n\n- External sector\n  - Gross international reserves (US$, millions): 234.1; 290.9; 324.2; 353.2; 357.2; 361.2; 363.2; 371.2; 378.7\n  - Reserves (in months of imports): 4.8; 5.2; 5.1; 4.4\n  - Exports of goods and services (percent of GDP): 54.5; 40.4; 40.1; 47.5; 54.4; 59.9; 61.7; 61.3; 61.2\n  - Imports of goods and services (percent of GDP): 56.3; 60.4; 67.5; 65.6; 66.0; 65.9; 64.7; 64.0\n  - External debt (gross) (percent of GDP): 81.8; 92.9; 94.8; 91.7; 87.5; 83.9; 77.5; 72.5; 68.0\n\n- Notes provided with indicators:\n  - 1/ Includes Citizenship-by-Investment (CBI) related non-tax revenue.\n  - 2/ The expenditure classification was revised in 2016 from GFSM 1986 format to GFSM 2014 format.\n  - 3/ Includes the impact of the debt restructuring agreement for the 2025 bonds.\n\nSource: IMF Press Release No. 22/147 — IMF Executive Board Concludes 2022 Article IV Consultation with Grenada (May 10, 2022).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Grenada and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2022/05/10/pr22147-grenada-imf-executive-board-concludes-2022-article-iv-consultation-with-grenada"
    }
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    "Published: May 10, 2022",
    "Tourism-dependent economy: real output declined by 14 percent in 2020.",
    "Growth: 2021 estimated at 5.6 percent, driven by construction and agriculture.",
    "Policy response: containment measures, increased health and social spending, expanded public investment program.",
    "Fiscal and external consequences: central government debt rose and the current account deficit widened.",
    "Financial sector: has so far weathered the crisis well.",
    "Government priorities: seeking international support to implement Disaster Resilience Strategy and transition towards renewable energy.",
    "Growth projection: 3.6 percent in 2022 on construction activity, gradual pickup in tourist arrivals, and recovery in offshore education.",
    "War in Ukraine: affects Grenada primarily through higher commodity prices and is a significant headwind.",
    "Major risks: a further rise in global commodity prices (potentially increasing inflation) and a more prolonged pandemic with implications for tourism recovery.",
    "Commendation: authorities’ timely response to the pandemic, facilitated by past fiscal prudence.",
    "Immediate priorities emphasized by Directors:",
    "Medium-term priorities:",
    "Fiscal framework:",
    "Financial sector recommendations:",
    "Structural recommendations to boost competitiveness and growth:",
    "Human development and social indicators:",
    "National income and prices (selected years: 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027)",
    "Central government balances (accrual) (percent of GDP, selected)",
    "Public debt (incl. guaranteed) (percent of GDP)",
    "Savings-Investment balance (percent of GDP)",
    "External sector",
    "Notes provided with indicators:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Grenada and the IMF](http://www.imf.org/external/country/GRD/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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