{
  "title": "Grenada: Staff Concluding Statement of the 2025 Article IV Mission",
  "publication": "IMF News, October 29, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission",
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  "summary": "Grenada’s economy continues to navigate elevated global uncertainties well in the aftermath of Hurricane Beryl.",
  "publishDate": "2025-10-29",
  "sections": [
    {
      "heading": "Economic context and mission findings",
      "content": "- Grenada’s economy continues to navigate elevated global uncertainties in the aftermath of Hurricane Beryl.\n- Economic activity remains robust, driven by strong construction and other domestic sectors that offset moderating growth in tourism.\n- Fiscal position described as comfortable, supported by the proven effectiveness of the post-disaster financing framework and prudent savings of recent citizenship-by-investment (CBI) revenues.\n- Mission focused on three key priorities: \n  - ensuring careful management of large public investments in alignment with public debt reduction objectives,\n  - containing vulnerabilities in the non-bank financial system,\n  - strengthening foundations for long-term growth and resilience."
    },
    {
      "heading": "Near-term and medium-term outlook",
      "content": "- GDP growth projections and dynamics:\n  - GDP growth projected to accelerate to 4.4 percent in 2025 (from an estimated 3.3 percent in 2024).\n  - Headline growth projected to gradually taper to an estimated potential rate of 2.7 percent by 2029.\n  - High construction activity over the medium term, particularly for a new teaching hospital under Project Polaris, will sustain investment.\n- Inflation and external sector:\n  - Moderating inflation expected to gradually normalize to around 2 percent by 2028.\n  - Current account deficits projected to gradually narrow but remain elevated over the medium term due to high construction imports.\n- Financial system:\n  - Financial system remains stable amid strong recovery from historically subdued bank credit growth."
    },
    {
      "heading": "Fiscal position and public debt trajectory",
      "content": "- Fiscal balances and targets:\n  - Increased public investment amid more moderate non-tax revenue is projected to result in a 2025 primary deficit of 2.8 percent of GDP.\n  - Central government is committed to returning to the 1.5 percent of GDP primary balance floor from 2027.\n  - Central government concessional borrowing to fund planned infrastructure investments would temporarily halt the decline in general government debt.\n  - General government debt projected to reach the 60 percent of GDP target by 2033.\n- Public investment and fiscal risks:\n  - Large public investment projects address development needs but require careful management of long-term fiscal risks, including post-completion operating and maintenance costs.\n  - Recommendation to pursue a more comprehensive primary balance rule to align the fiscal rules framework more closely with the general government debt anchor.\n  - Interim recommendation that investments through statutory entities be included in central government budget planning and adhere to equivalent reporting and auditing requirements.\n  - Strengthen oversight and monitoring of state-owned enterprises and statutory bodies as their importance in fiscal operations increases."
    },
    {
      "heading": "Public financial management and investment execution",
      "content": "- Continue improvements to public investment and financial management alongside scaled-up public investment.\n- Maintain recent progress in project management and monitoring that has improved investment execution.\n- Operationalize the public-private partnership framework to catalyze private investment, including around Project Polaris.\n- Integrate government savings with the debt management strategy to optimize financing costs.\n- Further strengthen medium-term fiscal framework projections to support a shift to multi-year budget planning.\n- Near-term revenue and spending measures suggested:\n  - Broaden the domestic tax base.\n  - Continue strengthening tax administration.\n  - Explore alternatives to costly tax reductions to incentivize low-emission vehicles.\n  - Introduce a more rules-based cost-price pass-through formula for gasoline.\n  - Improve targeting and efficiency of social benefits over time."
    },
    {
      "heading": "Non-bank financial sector vulnerabilities",
      "content": "- Credit growth and monitoring:\n  - Accelerating system-wide credit growth warrants careful monitoring; uptick in bank lending reflects normalization from historically subdued credit conditions.\n  - Credit growth backed by high system liquidity and strong asset quality compared to regional peers.\n- Credit union and provisioning concerns:\n  - Credit union asset quality shows encouraging signs of improvement, but ensuring adequacy of loan loss provisioning with prudent treatment of collateral values is critical.\n- Supervisory and market recommendations:\n  - Step up monitoring of loan forbearance practices and align impaired asset treatment with banks.\n  - Further enhance risk-based supervision and stress testing capacity.\n  - In the general insurance sector, enhance monitoring of reinsurance conditions and local market premium developments.\n  - Address pending action items from the CFTAF Mutual Evaluation to strengthen the AML/CFT framework."
    },
    {
      "heading": "Enhancing long-term growth, resilience, and institutional capacity",
      "content": "- Boosting domestic investment and tourism linkages:\n  - Facilitate domestic investment and deepen tourism sector integration with the local economy to boost long-term growth.\n  - The tourism-led growth model’s impact on GDP potential has been muted due to high foreign inputs and weak local investment; recent uptick in local private investment is encouraging.\n  - Strengthen small business development and access to finance, leverage regional initiatives such as the partial credit guarantee scheme, and deepen digitalization.\n  - Enhance locally offered tourism services, interlinkages with other sectors, and development of niche market offerings.\n  - Calibrated infrastructure investments, including Project Polaris, can catalyze these efforts when aligned with Grenada’s comparative advantage.\n- Human capital, productivity, and resilience:\n  - Expand youth-focused technical and vocational training.\n  - Continue modernization of education infrastructure and enhance job-matching services.\n  - Progress development partner-supported efforts to diversify the energy base and explore cost-effective opportunities to diversify import source markets.\n  - Continue investment in disaster-resilient infrastructure to complement the post-disaster financing framework proven effective after the 2024 Hurricane Beryl.\n- Strengthening statistics and institutional capacity:\n  - Data deficiencies hamper surveillance and increase uncertainty in economic projections; gaps include balance of payments coverage, monitoring of large investment projects, outdated CPI weights, and absence of GDP expenditure data.\n  - Staffing shortages and high turnover in key areas supporting macroeconomic surveillance and analysis are major constraints.\n  - Prioritize addressing staffing and data gaps in alignment with the ongoing public sector functional review and regularization process to harness technical capacity building support.\n\nSource: Grenada: Staff Concluding Statement of the 2025 Article IV Mission, October 29, 2025.\n\n---\n\n\n References\n\n- Grenada and the IMF\n- IMF Policy Advice -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- Article IV\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission"
    }
  ],
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    "Published: October 29, 2025",
    "Grenada’s economy continues to navigate elevated global uncertainties in the aftermath of Hurricane Beryl.",
    "Economic activity remains robust, driven by strong construction and other domestic sectors that offset moderating growth in tourism.",
    "Fiscal position described as comfortable, supported by the proven effectiveness of the post-disaster financing framework and prudent savings of recent citizenship-by-investment (CBI) revenues.",
    "Mission focused on three key priorities:",
    "GDP growth projections and dynamics:",
    "Inflation and external sector:",
    "Financial system:",
    "Fiscal balances and targets:",
    "Public investment and fiscal risks:",
    "Continue improvements to public investment and financial management alongside scaled-up public investment.",
    "Maintain recent progress in project management and monitoring that has improved investment execution.",
    "Operationalize the public-private partnership framework to catalyze private investment, including around Project Polaris.",
    "Integrate government savings with the debt management strategy to optimize financing costs.",
    "Further strengthen medium-term fiscal framework projections to support a shift to multi-year budget planning.",
    "Near-term revenue and spending measures suggested:",
    "Credit growth and monitoring:",
    "Credit union and provisioning concerns:",
    "Supervisory and market recommendations:",
    "Boosting domestic investment and tourism linkages:",
    "Human capital, productivity, and resilience:",
    "Strengthening statistics and institutional capacity:",
    "[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)",
    "[Mission Concluding Statements](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Article IV](https://www.imf.org/external/pubs/ft/aa/index.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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