A view of St George's, the capital of Grenada. (Photo: Britannica)

Grenada will grow by 6.25% in 2021 — IMF

A view of St George's, the capital of Grenada. (Photo: Britannica)

The International Monetary Fund (IMF) has projected that Grenada will grow by 6.25 per cent in 2021.

The prediction follows on the heels of the IMF’s Executive Board approving the disbursement of US$22.4 million under the Rapid Credit Facility to help the country deal with the economic impact of the coronavirus.

The International Monetary Fund building in Washington, DC, USA (File photo)

Grenada’s economy has “enjoyed a favourable multi-year macroeconomic performance prior to the COVID-19 outbreak” with growth averaging “almost 5 per cent in 2014-19, well above the 20-year historical average of 2.75 per cent”, according to the IMF.

“Grenada’s key macroeconomic indicators were expected to remain broadly at 2019 levels,” the fund added.

While noting that sectors such as tourism, construction and agriculture contributed to the country’s growth leading up to the pandemic, the financial institution pointed out that revised projections indicate a drastic decline in growth given the considerable impact on tourism.

Moreover, “the projections assume a modest recovery beginning in Q4 2020 leading to a perceptible rebound in 2021, when the economy is projected to grow by about 6.25 per cent”.

Dr Keith Mitchell and his Cabinet have reviewed and decided on the GCNA and GCA’s proposal for COVID-19 relief. (File photo)

Responding to the revised projections, Prime Minister of Grenada Dr Keith Mitchell said, “it is reflective of the level of confidence in Grenada’s economy and the country’s future, based both on Government’s management of the economy and the level of economic activity that is expected, primarily in the construction sector with several major public and private sector investments underway, as we reopen that sector for activities.”

The IMF report also noted that “given the strong prior fiscal position, the government financing situation looks manageable if the fiscal liquidity is well-protected and extreme shock scenarios do not materialise”.