IMF has published Article IV consultation statement on 2019 mission to Grenada.
The Grenadian economy continues to grow robustly. GDP expanded by 4¼ percent in 2018, driven by strong activity in construction and tourism. Unemployment has been falling, but remains high at 21.7 percent as of mid-2018. Inflation has remained low. After trending down for several years, bank credit growth has turned positive with continued improvements in asset quality, while lending by credit unions has continued to expand rapidly.
The external current account deficit likely narrowed in 2018 due to strong tourism receipts, but remains elevated at around 11 percent of GDP. Robust FDI flows, including from the citizenship by investment (CBI) program, are financing the external deficit while supporting economic growth.
IMF said in its statement CBI inflows have helped channel sizable resources to the contingency fund that could be used for mitigating the effects of natural disasters. A national Disaster Resilience Strategy could target comprehensive improvements in resilient infrastructure, financial protection, and post-disaster response.
Grenada’s Growth is set to remain solid in 2019, but is projected to ease somewhat over the medium-term, consistent with a waning of FDI-driven construction.
IMF recommendations include Strict compliance with AML/CFT standards and due diligence requirements should help to forcefully pre-empt any related concerns, as well as risks to correspondent banking relationships.
Read the full statement here
