by Linda Straker
- CDB – economic growth will be at 4.5%
- Fiscal performances should continue to benefit from GOGR’s adherence to the Fiscal Responsibility Act
The Caribbean Development Bank (CDB) is projecting a positive medium-term outlook for Grenada and for 2019 the economic growth will be at 4.5%, with similar outcomes expected over the medium term.
“The construction, tourism, agriculture and private education sectors will also drive performance. In terms of construction, there should be further momentum from major road network upgrades and ongoing private sector projects,” states the Banks 2018 Economic Review of the island which was released on Tuesday, 12 March 2019.
“The tourism sector should continue to expand as a result of increased room capacity and higher demand. The agriculture sector should recover, reflecting the start of projects aimed at mitigating the effects of weather conditions,” said the report which points out that notwithstanding, economic growth is still expected to be tempered by the decline in private sector credit in 2018.
According to the 6-page report, the fiscal performances in 2019 for Grenada should continue to benefit from GOGR’s adherence to the Fiscal Responsibility Act. “The primary and overall surpluses are projected to be 5.5% and 3.5% of GDP, respectively. This would represent continued adherence to GOGR’s policy of fiscal sustainability,” said the report with a disclaimer that which warns that the opinions, findings, interpretations and conclusions expressed in this publication are those of the staff of CDB and do not necessarily reflect the official policy or position of CDB, its Board of Directors, or the countries they represent.”
The report also advises that in addition, debt sustainability is expected to be restored over the medium term by means of further fiscal consolidation and Public debt is projected to be further reduced to 59.6% in 2019. In 2018 Public debt as a percentage of GDP declined to 62.7%
The report said that although international reserves remain adequate, the current account deficit worsened in 2018. “The deficit widened to 7.4% of GDP, relative to 6.7% in 2017. Based on data up to June 2018, this deterioration reflected a growing trade deficit as a result of faster growth in imports relative to exports,” said the report which also refers to data from IMF.
The expansion in imports to Grenada according to the report was attributed to the increase in oil prices, as well as higher import demand. Exports were adversely impacted by poor performance in the agricultural sector. International reserves remained adequate, at 3.4 months as at end 2018.
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