## Grenada: Staff Concluding Statement of the 2025 Article IV Mission _IMF News, October 29, 2025_ ## Source details **Canonical URL:** [Grenada: Staff Concluding Statement of the 2025 Article IV Mission](https://www.imf.org/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission) ## Other formats - [Markdown version](/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission/index.md) - [Structured JSON version](/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission/index.json) - [Bundle manifest](/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission/bundle-manifest.json) ## Bibliographic details - Published: October 29, 2025 --- ### Economic context and mission findings - 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: - ensuring careful management of large public investments in alignment with public debt reduction objectives, - containing vulnerabilities in the non-bank financial system, - strengthening foundations for long-term growth and resilience. ### Near-term and medium-term outlook - GDP growth projections and dynamics: - GDP growth projected to accelerate to 4.4 percent in 2025 (from an estimated 3.3 percent in 2024). - Headline growth projected to gradually taper to an estimated potential rate of 2.7 percent by 2029. - High construction activity over the medium term, particularly for a new teaching hospital under Project Polaris, will sustain investment. - Inflation and external sector: - Moderating inflation expected to gradually normalize to around 2 percent by 2028. - Current account deficits projected to gradually narrow but remain elevated over the medium term due to high construction imports. - Financial system: - Financial system remains stable amid strong recovery from historically subdued bank credit growth. ### Fiscal position and public debt trajectory - Fiscal balances and targets: - Increased public investment amid more moderate non-tax revenue is projected to result in a 2025 primary deficit of 2.8 percent of GDP. - Central government is committed to returning to the 1.5 percent of GDP primary balance floor from 2027. - Central government concessional borrowing to fund planned infrastructure investments would temporarily halt the decline in general government debt. - General government debt projected to reach the 60 percent of GDP target by 2033. - Public investment and fiscal risks: - Large public investment projects address development needs but require careful management of long-term fiscal risks, including post-completion operating and maintenance costs. - Recommendation to pursue a more comprehensive primary balance rule to align the fiscal rules framework more closely with the general government debt anchor. - Interim recommendation that investments through statutory entities be included in central government budget planning and adhere to equivalent reporting and auditing requirements. - Strengthen oversight and monitoring of state-owned enterprises and statutory bodies as their importance in fiscal operations increases. ### Public financial management and investment execution - 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: - Broaden the domestic tax base. - Continue strengthening tax administration. - Explore alternatives to costly tax reductions to incentivize low-emission vehicles. - Introduce a more rules-based cost-price pass-through formula for gasoline. - Improve targeting and efficiency of social benefits over time. ### Non-bank financial sector vulnerabilities - Credit growth and monitoring: - Accelerating system-wide credit growth warrants careful monitoring; uptick in bank lending reflects normalization from historically subdued credit conditions. - Credit growth backed by high system liquidity and strong asset quality compared to regional peers. - Credit union and provisioning concerns: - Credit union asset quality shows encouraging signs of improvement, but ensuring adequacy of loan loss provisioning with prudent treatment of collateral values is critical. - Supervisory and market recommendations: - Step up monitoring of loan forbearance practices and align impaired asset treatment with banks. - Further enhance risk-based supervision and stress testing capacity. - In the general insurance sector, enhance monitoring of reinsurance conditions and local market premium developments. - Address pending action items from the CFTAF Mutual Evaluation to strengthen the AML/CFT framework. ### Enhancing long-term growth, resilience, and institutional capacity - Boosting domestic investment and tourism linkages: - Facilitate domestic investment and deepen tourism sector integration with the local economy to boost long-term growth. - 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. - Strengthen small business development and access to finance, leverage regional initiatives such as the partial credit guarantee scheme, and deepen digitalization. - Enhance locally offered tourism services, interlinkages with other sectors, and development of niche market offerings. - Calibrated infrastructure investments, including Project Polaris, can catalyze these efforts when aligned with Grenada’s comparative advantage. - Human capital, productivity, and resilience: - Expand youth-focused technical and vocational training. - Continue modernization of education infrastructure and enhance job-matching services. - Progress development partner-supported efforts to diversify the energy base and explore cost-effective opportunities to diversify import source markets. - Continue investment in disaster-resilient infrastructure to complement the post-disaster financing framework proven effective after the 2024 Hurricane Beryl. - Strengthening statistics and institutional capacity: - 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. - Staffing shortages and high turnover in key areas supporting macroeconomic surveillance and analysis are major constraints. - Prioritize addressing staffing and data gaps in alignment with the ongoing public sector functional review and regularization process to harness technical capacity building support. *Source: Grenada: Staff Concluding Statement of the 2025 Article IV Mission, October 29, 2025.* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2025/10/29/cs-grenada-staff-concluding-statement-of-the-2025-article-iv-mission_