{ "title": "IMF Executive Board Concludes 2023 Article IV Consultation with Grenada", "publication": "IMF News, July 19, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada", "canonical": "https://www.imf.org/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada", "overlayPath": "/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/index.md", "summary": "Grenada’ tourism-dependent economy continued to recover from the pandemic amidst rising energy and food prices. Growth is estimated to have reached 6.4 percent in 2022, driven by a tourism rebound and construction activity. Inflation rose moderately to 2.", "publishDate": "2023-07-19", "sections": [ { "heading": "Economic performance (recent)", "content": "- Growth is estimated to have reached 6.4 percent in 2022, driven by a tourism rebound and construction activity.\n- Inflation rose moderately to 2.9 percent by end-2022, as the authorities’ policy response dampened the pass through from rising global food and fuel prices.\n- Grenada’s tourism-dependent economy continued to recover from the pandemic amidst rising energy and food prices.\n- Public debt is now back on a downward trend.\n- The financial sector is well-capitalized and liquid although non-performing loans (NPLs) of credit unions have risen." }, { "heading": "Outlook and risks", "content": "- Real GDP is projected to expand by 3.9 percent in 2023.\n- Inflation is expected to peak at 3.2 percent toward the end of 2023.\n- Downside risks: an economic slowdown of key tourist source markets; renewed increases in food and fuel prices; a natural disaster; an abrupt decline in revenues from the Citizenship-by-Investment (CBI) program — any of which could weaken growth, worsen the fiscal position, and threaten debt sustainability.\n- Upside scenarios: shifting demand for services in advanced economies could lead to stronger tourism demand; investment projects may have a more front-loaded impact on the economy." }, { "heading": "Fiscal policy and public debt", "content": "- The government triggered the escape clause in 2020–22 to address the pandemic fallout and is committed to a return to the fiscal rules in 2023.\n- Planned amendment of the Fiscal Responsibility Law in 2023 to support sustainable development.\n- Public debt is assessed to be on a downward path and sustainable, but Grenada remains “in debt distress” due to outstanding arrears of about US$37.6 million to official bilateral creditors, including Trinidad and Tobago and Algeria.\n- Immediate priority: return to the fiscal rules to preserve credibility; reduce spending on relief measures as the initial food and fuel price spike dissipates.\n- Recommendations to improve fiscal management:\n - Use the Fiscal Responsibility Framework amendment to simplify fiscal rules, institute a more effective medium-term fiscal framework, and enhance accountability and oversight.\n - Clarify speed of debt return to medium-term path following a shock.\n - Fully operationalize a contingency fund to smooth government expenditure and provide insurance for major shocks.\n - Enhance transparency by publishing public sector and SOE audited financial statements and improving data on CBI flows and their usage.\n - Increase efficiency of tax system and public spending; update the tax incentive framework based on reassessment of rationales, costs, and benefits.\n - Strengthen public investment management to address implementation bottlenecks, improve project oversight, and strengthen procurement transparency and accountability." }, { "heading": "Social protection, pensions, and public employment", "content": "- Focus on structurally improving effectiveness and targeting of social assistance programs (including improvements in determination of eligibility) and moving away from broad-based support.\n- Reforms to the National Insurance Scheme (NIS): phased increase in the contributory rate and pensionable age to improve NIS financial position; implement quickly.\n- New pension system for new entrants to public service should be designed to be actuarially sound.\n- Regularization of public sector workers should be guided by a review of job functions to assess allocation of resources and support retraining.\n- Conduct a comprehensive wage review and payroll audits to ensure the wage grid reflects current labor market conditions." }, { "heading": "Financial sector and supervision", "content": "- The financial sector is stable, liquid, and resilient to shocks amid tightening global financial conditions, but NPLs at credit unions are at elevated levels.\n- Recommended actions for credit unions:\n - Tighten lending standards and provisioning requirements.\n - Enforce corrective actions for institutions not meeting prudential requirements.\n - Strengthen debt collection efforts, internal governance, and risk management practices.\n- To achieve effective risk-based, forward-looking supervision: obtain more granular information, build better analytical capacity, and implement well-designed stress testing.\n- Improve financial literacy and encourage financial institutions to leverage the ECCU regional credit bureau when it comes into operation." }, { "heading": "Competitiveness, productivity, and resilience", "content": "- Increase domestic value-added of tourism by strengthening linkages with agriculture and fisheries.\n- Boost agricultural productivity and build resilience to adverse weather events.\n- Address identified gender gaps and incentivize female labor force participation.\n- Training and apprenticeship programs should increase technical and entrepreneurial skills, better integrate academic institutions and employers, and facilitate transition to employment.\n- Implement the Disaster Resilience Strategy and expedite transition to renewable energy to enhance resilience and competitiveness.\n- Improve regulatory framework to incentivize renewable energy adoption; use concessional financing from multilaterals and climate funds to catalyze private financing for renewables and climate adaptation.\n- Improve communication about environmental impacts of renewable energy projects to foster public support and private financing." }, { "heading": "Executive Board assessments (selected)", "content": "- Fiscal buffers built up over the past decade allowed authorities to respond swiftly to the pandemic and to higher energy and food prices; relief measures in 2022 protected the population but could have been better targeted.\n- The external position is assessed to be weaker than the level implied by fundamentals and desirable policies. Estimated imputed reserves are assessed as adequate.\n- Public debt is back on a downward path and assessed sustainable, but the presence of about US$37.6 million in outstanding official bilateral arrears means Grenada remains classified as “in debt distress.”" }, { "heading": "Key statistics (selected; annual or end-period as shown)", "content": "- Growth (GDP at constant prices): 2020 -13.8; 2021 4.7; 2022 6.4; 2023 3.9; 2024 3.8; 2025 3.5; 2026 3.2; 2027 2.7.\n- GDP deflator: 2020 -0.3; 2021 1.2; 2022 1.8; 2023 3.0; 2024 2.8; 2025 2.0; 2026 2.2.\n- Consumer prices, end of period: 2020 -0.8; 2021 1.9; 2022 2.9.\n- Credit to private sector (end of period): 2020 3.1; 2021 2.1; 2022 5.2; 2023 4.8; 2024 4.6; 2025 4.2.\n- Broad money (M2): 2020 9.1; 2021 8.5; 2022 9.9; 2023 5.7; 2024 4.3; 2025 3.3.\n- Central government revenue and grants (percent of GDP): 2020 28.1; 2021 32.1; 2022 33.7; 2023 30.5; 2024 29.9; 2025 29.6; 2026 28.8; 2027 28.5; 2028 28.4.\n- Central government expenditure (percent of GDP): 2020 32.7; 2021 31.7; 2022 28.0; 2023 27.6; 2024 28.6.\n- Capital expenditure (percent of GDP): 2020 9.6; 2021 8.7; 2022 10.5; 2023 7.3; 2024 6.9; 2025 6.7; 2026 7.1; 2027 7.0.\n- Primary balance (percent of GDP): 2020 -2.6; 2021 2.6; 2022 3.6; 2023 1.6; 2024 1.3; 2025 1.0.\n- Overall balance (percent of GDP): 2020 -4.5; 2021 0.3; 2022 0.2; 2023 0.0; 2024 -0.2.\n- Public debt (incl. guaranteed, percent of GDP): 2020 71.4; 2021 71.0; 2022 64.6; 2023 61.1; 2024 58.3; 2025 55.0; 2026 51.9; 2027 49.3; 2028 47.1.\n - Domestic: 2020 16.2; 2021 15.6; 2022 13.1; 2023 9.3; 2024 8.0; 2025 6.3; 2026 5.1.\n - External: 2020 55.2; 2021 55.4; 2022 51.4; 2023 50.3; 2024 47.7; 2025 45.6; 2026 43.6; 2027 42.0.\n- Savings-Investment balance (percent of GDP): 2020 -16.4; 2021 -13.2; 2022 -17.3; 2023 -14.8; 2024 -12.2; 2025 -12.3; 2026 -11.8; 2027 -11.5.\n - Savings: 2020 15.2; 2021 15.4; 2022 10.7; 2023 12.4; 2024 13.7; 2025 14.7; 2026 15.5.\n - Investment: 2020 31.6; 2021 28.7; 2022 25.5; 2023 25.6; 2024 25.9; 2025 27.0; 2026 27.3; 2027 27.7.\n- Gross international reserves (millions of dollars): 2020 290.9; 2021 324.2; 2022 352.6; 2023 384.6; 2024 412.6; 2025 414.6; 2026 422.6; 2027 430.1; 2028 451.7.\n - In months of imports: 2020 5.6; 2021 5.5; 2022 5.8; 2023 5.4.\n- Exports of goods and services (percent of GDP): 2020 41.1; 2021 48.4; 2022 52.9; 2023 58.6; 2024 58.2; 2025 57.2; 2026 56.4; 2027 55.9.\n- Imports of goods and services (percent of GDP): 2020 52.2; 2021 56.3; 2022 62.8; 2023 63.3; 2024 61.2; 2025 59.1; 2026 57.3; 2027 56.6.\n- External debt (gross, percent of GDP): 2020 92.9; 2021 95.5; 2022 92.7; 2023 88.2; 2024 83.6; 2025 79.5; 2026 76.0; 2027 72.8; 2028 70.2." }, { "heading": "Selected social and demographic indicators (as shown)", "content": "- Rank in UNDP Human Development Index: 68 (out of 189 countries, 2021).\n- Infant mortality rate per '000 births (2021): 14.4.\n- Adult illiteracy rate in percent (2014): 1.\n- Life expectancy at birth in years (2021): 75.\n- Poverty rate in percent of population (2019): 25.\n- GDP per capita in US$ (2021): 9010.\n- Unemployment rate (2021 Q2): 16.6.\n- Population in millions (2021): 0.12.\n\nPress Release No. 23/267 — IMF Communications Department, July 19, 2023.\n\n---\n\n\n References\n\n- Grenada and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/index.md)", "[Structured JSON version](/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/index.json)", "[Bundle manifest](/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/bundle-manifest.json)", "Published: July 19, 2023", "Growth is estimated to have reached 6.4 percent in 2022, driven by a tourism rebound and construction activity.", "Inflation rose moderately to 2.9 percent by end-2022, as the authorities’ policy response dampened the pass through from rising global food and fuel prices.", "Grenada’s tourism-dependent economy continued to recover from the pandemic amidst rising energy and food prices.", "Public debt is now back on a downward trend.", "The financial sector is well-capitalized and liquid although non-performing loans (NPLs) of credit unions have risen.", "Real GDP is projected to expand by 3.9 percent in 2023.", "Inflation is expected to peak at 3.2 percent toward the end of 2023.", "Downside risks: an economic slowdown of key tourist source markets; renewed increases in food and fuel prices; a natural disaster; an abrupt decline in revenues from the Citizenship-by-Investment (CBI) program — any of which could weaken growth, worsen the fiscal position, and threaten debt sustainability.", "Upside scenarios: shifting demand for services in advanced economies could lead to stronger tourism demand; investment projects may have a more front-loaded impact on the economy.", "The government triggered the escape clause in 2020–22 to address the pandemic fallout and is committed to a return to the fiscal rules in 2023.", "Planned amendment of the Fiscal Responsibility Law in 2023 to support sustainable development.", "Public debt is assessed to be on a downward path and sustainable, but Grenada remains “in debt distress” due to outstanding arrears of about US$37.6 million to official bilateral creditors, including Trinidad and Tobago and Algeria.", "Immediate priority: return to the fiscal rules to preserve credibility; reduce spending on relief measures as the initial food and fuel price spike dissipates.", "Recommendations to improve fiscal management:", "Focus on structurally improving effectiveness and targeting of social assistance programs (including improvements in determination of eligibility) and moving away from broad-based support.", "Reforms to the National Insurance Scheme (NIS): phased increase in the contributory rate and pensionable age to improve NIS financial position; implement quickly.", "New pension system for new entrants to public service should be designed to be actuarially sound.", "Regularization of public sector workers should be guided by a review of job functions to assess allocation of resources and support retraining.", "Conduct a comprehensive wage review and payroll audits to ensure the wage grid reflects current labor market conditions.", "The financial sector is stable, liquid, and resilient to shocks amid tightening global financial conditions, but NPLs at credit unions are at elevated levels.", "Recommended actions for credit unions:", "To achieve effective risk-based, forward-looking supervision: obtain more granular information, build better analytical capacity, and implement well-designed stress testing.", "Improve financial literacy and encourage financial institutions to leverage the ECCU regional credit bureau when it comes into operation.", "Increase domestic value-added of tourism by strengthening linkages with agriculture and fisheries.", "Boost agricultural productivity and build resilience to adverse weather events.", "Address identified gender gaps and incentivize female labor force participation.", "Training and apprenticeship programs should increase technical and entrepreneurial skills, better integrate academic institutions and employers, and facilitate transition to employment.", "Implement the Disaster Resilience Strategy and expedite transition to renewable energy to enhance resilience and competitiveness.", "Improve regulatory framework to incentivize renewable energy adoption; use concessional financing from multilaterals and climate funds to catalyze private financing for renewables and climate adaptation.", "Improve communication about environmental impacts of renewable energy projects to foster public support and private financing.", "Fiscal buffers built up over the past decade allowed authorities to respond swiftly to the pandemic and to higher energy and food prices; relief measures in 2022 protected the population but could have been better targeted.", "The external position is assessed to be weaker than the level implied by fundamentals and desirable policies. Estimated imputed reserves are assessed as adequate.", "Public debt is back on a downward path and assessed sustainable, but the presence of about US$37.6 million in outstanding official bilateral arrears means Grenada remains classified as “in debt distress.”", "Growth (GDP at constant prices): 2020 -13.8; 2021 4.7; 2022 6.4; 2023 3.9; 2024 3.8; 2025 3.5; 2026 3.2; 2027 2.7.", "GDP deflator: 2020 -0.3; 2021 1.2; 2022 1.8; 2023 3.0; 2024 2.8; 2025 2.0; 2026 2.2.", "Consumer prices, end of period: 2020 -0.8; 2021 1.9; 2022 2.9.", "Credit to private sector (end of period): 2020 3.1; 2021 2.1; 2022 5.2; 2023 4.8; 2024 4.6; 2025 4.2.", "Broad money (M2): 2020 9.1; 2021 8.5; 2022 9.9; 2023 5.7; 2024 4.3; 2025 3.3.", "Central government revenue and grants (percent of GDP): 2020 28.1; 2021 32.1; 2022 33.7; 2023 30.5; 2024 29.9; 2025 29.6; 2026 28.8; 2027 28.5; 2028 28.4.", "Central government expenditure (percent of GDP): 2020 32.7; 2021 31.7; 2022 28.0; 2023 27.6; 2024 28.6.", "Capital expenditure (percent of GDP): 2020 9.6; 2021 8.7; 2022 10.5; 2023 7.3; 2024 6.9; 2025 6.7; 2026 7.1; 2027 7.0.", "Primary balance (percent of GDP): 2020 -2.6; 2021 2.6; 2022 3.6; 2023 1.6; 2024 1.3; 2025 1.0.", "Overall balance (percent of GDP): 2020 -4.5; 2021 0.3; 2022 0.2; 2023 0.0; 2024 -0.2.", "Public debt (incl. guaranteed, percent of GDP): 2020 71.4; 2021 71.0; 2022 64.6; 2023 61.1; 2024 58.3; 2025 55.0; 2026 51.9; 2027 49.3; 2028 47.1.", "Savings-Investment balance (percent of GDP): 2020 -16.4; 2021 -13.2; 2022 -17.3; 2023 -14.8; 2024 -12.2; 2025 -12.3; 2026 -11.8; 2027 -11.5.", "Gross international reserves (millions of dollars): 2020 290.9; 2021 324.2; 2022 352.6; 2023 384.6; 2024 412.6; 2025 414.6; 2026 422.6; 2027 430.1; 2028 451.7.", "Exports of goods and services (percent of GDP): 2020 41.1; 2021 48.4; 2022 52.9; 2023 58.6; 2024 58.2; 2025 57.2; 2026 56.4; 2027 55.9.", "Imports of goods and services (percent of GDP): 2020 52.2; 2021 56.3; 2022 62.8; 2023 63.3; 2024 61.2; 2025 59.1; 2026 57.3; 2027 56.6.", "External debt (gross, percent of GDP): 2020 92.9; 2021 95.5; 2022 92.7; 2023 88.2; 2024 83.6; 2025 79.5; 2026 76.0; 2027 72.8; 2028 70.2.", "Rank in UNDP Human Development Index: 68 (out of 189 countries, 2021).", "Infant mortality rate per '000 births (2021): 14.4.", "Adult illiteracy rate in percent (2014): 1.", "Life expectancy at birth in years (2021): 75.", "Poverty rate in percent of population (2019): 25.", "GDP per capita in US$ (2021): 9010.", "Unemployment rate (2021 Q2): 16.6.", "Population in millions (2021): 0.12.", "[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/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/index.md", "json": "/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/index.json", "bundleManifest": "/en/news/articles/2023/07/18/pr23267-grenada-imf-executive-board-concludes-2023-article-iv-consultation-with-grenada/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:16:04.385Z" }