by Linda Straker
- Grenada to receive EC$500,000 to assist against Covid-19
- World Health Organisation declared Covid-19 a global pandemic on 11 March 2020
- Equipment, supplies and drugs procured through OECS Pharmaceutical Procurement Service
Grenada, like other members of the Eastern Caribbean Currency Union (ECCU), will be receiving EC$500,000 from the Eastern Caribbean Central Bank (ECCB) to assist in the fight against the novel coronavirus officially named Covid-19.
On the recommendation of the ECCB Board of Directors, the Monetary Council of the Eastern Caribbean Central Bank has approved total grant funding of EC$4 million.
A news release from the ECCB said that the institution is fully cognisant of the potential economic, financial and social impact of Covid-19 on member countries. On 11 March 2020, the World Health Organisation (WHO) declared Covid-19 a global pandemic.
Outlining the purpose of the funding, the release said, “Half of the grant was disbursed on 13 March to purchase testing and other critical equipment to detect, contain and manage Covid-19. The remainder will be utilised to procure equipment and supplies such as ventilators and drugs through the Organisation of Eastern Caribbean States Pharmaceutical Procurement Service (OECS PPS), a bulk procurement mechanism.”
Chairman of the Monetary Council, Dr The Right Honourable Keith Mitchell, Prime Minister and Minister of Finance for Grenada, said, “We are facing an unprecedented situation with the Covid-19 pandemic. Our countries are very appreciative of this thoughtful and practical gesture by the bank.”
According to the communiqué issued after a Special Meeting of the OECS Authority and the Monetary Council of the ECCU which was held virtually on 15 March 2020 under the best-case scenario (containment of Covid by the end of June 2020), real GDP growth for the ECCU for 2020 will slow to 2.1%. This will be down from an initial estimate of 3.3%.
Under a moderate case scenario (containment by end of summer), ECCU real GDP growth is projected to decelerate to 1.5%; and in the worst-case scenario (global recession), a contraction of 1.9% is projected.
Despite this projection, at present, the foreign reserves of the currency union are strong with a current backing of 99.7%. “In light of recent market developments, income on the reserves will rise in the short term. However, income will be reduced in the upcoming months based on lower interest rates by the Federal Reserve. For 2020, the backing ratio is projected between 97%–99% this year.
With regards to fiscal impact, it expected that there will be an increase in the ECCU fiscal deficit by about 4% of GDP due to lower growth, lower revenues, and higher expenditure for Covid-19.