ST. GEORGE’S, Grenada, – The Grenada government says the country experienced robust economic performance last year, despite the devastating impact of a major hurricane.
It said that the near-term outlook is also favorable and that real gross domestic product (GDP) growth is forecast to grow by 4.1 per cent in 2025, driven by continued tourism demand and post Hurricane Beryl reconstruction activities, following the 3.7 percent realized in 2024.
Finance Minister Dennis Cornwall, in presenting the country’s national budget of EC$1.91 billion (One EC dollar=US$0.37 cents) said consumer prices declined in 2024 from the high levels experienced in 2023, helped by the government policies to keep prices down, including the removal of the value added tax (VAT) on basic food and other essential items and the electricity and petroleum price subsidies.
He said that notwithstanding, food inflation, although declining, remained unacceptably higher than overall inflation and that the average overall inflation is forecast to remain low and stable at around 0.9 per cent over the medium term.
Cornwall said labor conditions have remained stable, with a consistently low unemployment rate of around 12 per cent in the last two to three years and with continued buoyant economic expansion in 2025, the unemployment rate is forecast to decline further.
Cornwall said unprecedented Citizenship-by-Investment (CBI) inflows and the Caribbean Catastrophe Risk Insurance Facility (CCRIF) insurance payout bolstered government’s fiscal position in 2024.
He said a primary surplus of EC$432.9 million or 11.3 per cent of GDP, was realized, in spite of extraordinary spending on account of Hurricane Beryl.
Under the CBI program, Grenada provides citizenship to foreign investors in return for making a significant constitution to the socio-economic development of the country.
Cornwall said that to support the continued resilient recovery of the Grenadian economy, the fiscal rules and targets of the Fiscal Resilience Act (FRA) will be further suspended in 2025 to allow for increased rehabilitation and reconstruction spending.
He told legislators that the financial sector remained stable and sound, and external stability was well anchored in 2024 and that going forward, the financial sector conditions and the external account are expected to improve, further reinforcing macroeconomic stability and growth
“On the global front, economic growth is projected to remain stable at 3.3 per cent in 2025 based on the most recent world economic outlook by the International Monetary Fund (IMF). However, this positive outlook is pregnant with uncertainties, fueled largely by ongoing geopolitical tensions and more recently protectionist policies in the United States,” Cornwall added.
Meanwhile, the government says it will open an account at the St. Kitts-based Eastern Caribbean Central Bank (ECCB) as part of its strategy to create a saving fund for the building of a new hospital.
It said that the facility will offer a higher standard of care, expanded specialist services, and improved diagnostic capabilities, describing it as the most transformation initiative on the health care agenda for the ruling Dickon Mitchell administration.
Cornwall said an estimated EC$23.6 million has been allocated for this project , noting “additionally, the Cabinet has approved the establishment of a Special Fund at the ECCB into which a sum of US$25 million is to be deposited as Government’s contribution towards the overall financing of Project Polaris.
“Furthermore, a small percentage of all NTF (National Transformation Fund) receipts will be set aside monthly, commencing June 2025 after finalizing the legal requirements, to support the smooth transition to the new Hospital once completed,” he said.
The NTF established by the CBI program, provides for foreign investors to pay more than US$200,000 to secure citizenship. Government earned more than EC$500 million through the CBI last year.
The government says it will also be seeking to raise funds for the hospital project through its Budget Loan Authorisation Bill, which will allow the Finance Minister to borrow specified amounts of money from various sources.
Debate on the budget begins later on Monday with the newly appointed Opposition Leader, Emmalin Pierre, responding to the fiscal package.
