## Grenada: 2023 Article IV Consultation-Press Release; and Staff Report

_IMF Staff Country Reports, July 19, 2023_

## Source details

**Canonical URL:** [Grenada: 2023 Article IV Consultation-Press Release; and Staff Report](https://www.imf.org/en/publications/cr/issues/2023/07/18/grenada-2023-article-iv-consultation-press-release-and-staff-report-536521)

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## Bibliographic details
- Published: July 19, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400249945.002

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### Overview
- The 2023 Article IV Consultation analyses that the 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 2.9 percent by end-2022, as the authorities’ policy response dampened the pass through from rising global food and fuel prices.
- Public debt is now back on a downward trend.
- The financial sector is well capitalized and liquid although nonperforming loans (NPLs) of credit unions have risen.
- The government is committed to a return to the fiscal rules in 2023, after triggering the escape clause in 2020–22 to address the fallout of the pandemic.
- The government planned to amend the Fiscal Responsibility Law this year to best support the country’s sustainable development.
- The government is seeking international support to facilitate the implementation of its Disaster Resilience Strategy and a transition toward renewable energy, critical for enhancing resilience to natural disasters and economic competitiveness.

### Macroeconomic developments
- Growth: "6.4 percent in 2022" (estimated), driven by tourism rebound and construction activity.
- Inflation: "2.9 percent by end-2022", described as a moderate rise.
- External environment: recovery occurring "amidst rising energy and food prices" with policy measures to dampen passthrough.

### Fiscal position and public debt
- Public debt: described as "back on a downward trend".
- Fiscal rules and governance:
  - Government "committed to a return to the fiscal rules in 2023".
  - Escape clause was triggered in "2020–22" to address pandemic fallout.
  - Government "planned to amend the Fiscal Responsibility Law this year" to support sustainable development.

### Financial sector and vulnerabilities
- Capitalization and liquidity: the financial sector is "well capitalized and liquid".
- Asset quality concern: "nonperforming loans (NPLs) of credit unions have risen".

### Policy priorities and support needs
- Fiscal policy: return to fiscal rules in 2023 and amendment of the Fiscal Responsibility Law to align with sustainable development objectives.
- Resilience and climate-related priorities:
  - Implementation of the Disaster Resilience Strategy.
  - Transition toward renewable energy to enhance resilience to natural disasters and economic competitiveness.
- International support: government is "seeking international support" to facilitate the above resilience and energy transitions.

*Source: Grenada: 2023 Article IV Consultation-Press Release; and Staff Report (July 19, 2023).*

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_Source: https://www.imf.org/en/publications/cr/issues/2023/07/18/grenada-2023-article-iv-consultation-press-release-and-staff-report-536521_