2020 Annual Economic and Financial Review

2020 Annual Economic and Financial Review

GRENADA

Those outcomes caused the current account surplus to narrow to $38.7m (1.3 per cent of GDP), a steep reduction from $154.5m (4.7 per cent of GDP) recorded in the prior year. On the capital account, grants amounted to $103.1m (3.5 per cent of GDP), 10.3 per cent higher than 2019. Notably, capital expenditure more than tripled to $269.9m, as government repurchased Grenlec shares based on a court judgement. That transaction equated to 60.0 per cent of capital spending. Amid falling fiscal revenue and the need to provide safety nets for the most vulnerable, the Government of Grenada increased its liabilities in 2020. The total outstanding public sector debt rose by $97.8m to $2053.2m solely due to central government borrowing. Conversely, the debt stock of public corporations fell by $1.8m to $64.0m at the end of the review period. In 2019, Grenada’s debt to GDP ratio was 59.8 per cent, below the ECCB’s target of 60.0 per cent. However, given the impact of the pandemic, the debt to GDP ratio increased to 69.8 per cent in 2020.

Grenada Public Finance (EC$M)

900.0

800.0

700.0

600.0

500.0

400.0

300.0

200.0

100.0

0.0

2016

2017

2018

2019

2020

Current Revenue Current Expenditure Current Balance (before grants) Capital Expenditure

Tax receipts fell drastically in line with the downturn in economic activity. Tax revenue totalled $642.2m, a decline of $95.3m, fueled by lower intake from all classifications. The greatest reductions were on collections from domestic goods and services ($40.2m) and international trade and transactions ($33.9m). However, non-tax revenue inched up by $6.8m to $47.4m as inflows from the Citizenship by Investment Programme more than doubled. Consequently, total current revenue of $689.6m (23.5 per cent of GDP) was collected in 2020, $88.4m less than 2019. Current expenditure rose by $27.4m to $650.8m (22.1 per cent of GDP). This was primarily due to higher outlays on transfers and subsidies ($22.3m) as part of the Government’s COVID-19 Economic Stimulus Package. Personal emoluments also increased by $9.7m.

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