IMF Executive Board Concludes 2025 Article IV Consultation with Grenada
IMF News, January 21, 2026
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Bibliographic details
- Published: January 21, 2026
Overview
- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Grenada and considered and endorsed the staff appraisal without a meeting.
- Date on page: January 21, 2026.
- Press Release No. 26/011.
Economic performance in 2025
- Growth in 2025 is estimated to have accelerated to 4.4 percent, driven by strong investment and construction activity.
- Inflation has continued to moderate, reflecting easing global food and fuel prices; consumer prices, end of period (2025): 0.3.
- The fiscal position remains comfortable notwithstanding a temporary suspension of fiscal rules and an estimated 2025 primary deficit of 3.2 percent of GDP.
- Effectiveness of Grenada’s post-disaster financing framework and prudent savings of recent citizenship-by-investment (CBI) revenues provided space for continued investment in key development priorities.
- The financial sector remains stable, with a modest post-hurricane impact.
Medium-term outlook and key projections
- GDP growth is projected to gradually moderate to an estimated potential rate of 2.7 percent by 2029.
- Anticipated return to the 1.5 percent of GDP central government primary balance floor from 2027 would support putting public debt on a sustainable trajectory.
- Public debt target: 60 percent of GDP projected to be achieved by 2033.
- Selected projected output and price series (annual):
- Real GDP (2025–2030): 4.4, 3.2, 3.0, 2.9, 2.7 (for 2025, 2026, 2027, 2028, 2029 respectively).
- Nominal GDP (2025–2029): 4.3, 4.9, 4.8, 5.1 (note: table provides multiple year entries; preserve series as presented).
- Consumer prices, period average (2025): 0.7.
- Balance of payments and external sector:
- Current account balance (2025): -21.1 (percent of GDP, table shows -21.1 for 2024 and -17.5 for 2025—see table for year mapping).
- Exports of goods and services series include 58.9 (2024) and 59.3 (2025) as reported in the table.
- Imports of goods and services series include 70.1 (2024) and 67.2 (2025) as reported in the table.
- External debt (gross) series: 83.8 (2024), 79.0 (2025), 76.6 (2026).
- Memo items:
- Nominal GDP (millions of EC$): 3,768 (2024), 3,961 (2025), 4,133 (2026).
- Citizenship-by-Investment (CBI) inflows (percent of GDP): 7.7 (2024), 7.1 (2025), 7.0 (2026).
- Government CBI revenue (Percent of GDP): 14.7 (2024), 3.5 (2025).
Downside and upside risks
- Key downside risks:
- High susceptibility to shocks associated with tourism and import dependency.
- Vulnerability to natural disasters.
- Disruptions to CBI and FDI inflows.
- Materialization of risks in the domestic non-bank financial system.
- Delays or cost overruns in large investment projects.
- Main upside risk:
- Faster-than-projected tourism resort developments.
- Buffers and mitigation:
- A robust disaster resilience framework and government deposits provide important buffers against shocks.
Fiscal assessment and policy recommendations
- Short-run fiscal stance:
- The temporary suspension of the primary balance rule provided fiscal space for post-disaster reconstruction without disrupting other priority spending.
- Estimated 2025 primary deficit: 3.2 percent of GDP.
- Recommendation to return to fiscal rules:
- Returning to the fiscal rules in 2027 is important to safeguard fiscal discipline and keep debt on a sustainable path.
- Anticipated return to the 1.5 percent of GDP central government primary balance floor from 2027.
- Rule perimeter and reporting:
- The perimeter of the primary balance rule could be better aligned with the general government debt anchor.
- Recommendation to capture government off-budget and public on-lending-financed investments within the rule.
- Interim guidance: such investments should be included in central government budget planning and adhere to equivalent reporting and auditing standards.
- Public investment management:
- Fiscal risks from ambitious public investment projects require careful management: strengthen project management to minimize delays or cost overruns; assess future operating and maintenance costs to avoid unfunded liabilities.
- Operationalize the PPP framework to catalyze private investment (noted example: Project Polaris).
- Strengthen management of CBI resources, improve MTFF projections, and clear the backlog of audited government statements.
- SOE and statutory body oversight:
- Continue progress in strengthening SOE and statutory body oversight with a view to eventual integration into the Medium-Term Fiscal Framework.
Financial sector, credit, and AML/CFT
- Credit trends:
- Accelerating system-wide credit growth and non-bank vulnerabilities require careful monitoring.
- Credit to private sector series show acceleration (table entries include 3.1, 3.8, 10.4, 5.4, 5.2).
- Risk areas and recommended actions:
- Ensure loan loss provisions are sufficient in credit unions and step up forbearance monitoring.
- Enhance monitoring of reinsurance conditions and local market pricing in the general insurance sector.
- Authorities are encouraged to maintain recent momentum in strengthening the AML/CFT framework.
Structural reforms, competitiveness, and resilience
- Need to strengthen domestic foundations of growth:
- Facilitate local investment and business development.
- Enhance locally offered tourism services and intersectoral linkages.
- Reduce goods trade frictions.
- Strengthen human capital and productivity.
- Infrastructure and resilience:
- Infrastructure project decisions should pay close attention to disaster resilience in alignment with the updated National Adaptation plan.
Data and institutional capacity
- Data gaps and capacity constraints:
- Important data deficiencies include balance of payments coverage, monitoring of large investment projects, outdated CPI weights, and missing GDP expenditure data.
- Capacity constraints from persistent staffing shortages and turnover warrant prioritized attention.
- Recommended institutional actions:
- Improve quality of economic data and institutional capacity to support informed policymaking.
- Align priorities with the ongoing public sector functional review and staff regularization process.
Selected economic and social indicators (as reported)
- Rank in UNDP Human Development Index: 73 (out of 189 countries, 2023).
- 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$ (2023): 10,449.
- Unemployment rate (2025 Q2): 10.8.
- Population in millions (2023): 0.13.
Source: IMF Executive Board Concludes 2025 Article IV Consultation with Grenada, Press Release No. 26/011.