Grenada’s tourism-dependent economy was hit hard by the pandemic, with a decline in real output of 14% in 2020.
According to the IMF at the conclusion of its Article IV consultation, growth in 2021 is estimated to have partly recovered to 5.6%, driven by construction and agriculture.
Economic growth of 3.6% is projected for 2022, driven by construction activity, increased tourist arrivals, and the recovery in offshore education.
Central government debt rose to 94.8% of GDP in 2021 and the current account deficit widened to -24.5% of GDP.
Gross International Reserves stood at US$324.2 M or 4.8 months of good and services.
The IMF noted that while the near-term outlook is favourable, it remains subject to significant downside risks.
There will be a return to the fiscal rules in 2023, after the triggering of the escape clause in 2020–22 to allow for counter-cyclical fiscal policy.
To increase competitiveness and boost growth, the IMF pointed to the need to increase the value-added in tourism through deeper linkages across sectors, diversify
tourism sources & improve cost competitiveness.