ST GEORGE’S, Grenada – The International Monetary Fund (IMF) said yesterday that Grenada should experience economic growth of nearly 1.5 per cent this year, noting that Gross Domestic Product (GDP) had declined for a second year last year.
An IMF delegation, headed by Nita Thacker ended a one week visit on Tuesday to conduct discussions on the second review of the government’s economic programme supported by the IMF’s Extended Credit Facility (ECF) that was approved on April 2, last year.
The mission held discussions with Finance Minister Nazim Burke, senior government and private sector officials and Thacker said the discussions had been useful.
She said the main elements for recommending a completion of the review have been agreed upon and “some remaining work to complete the required documentation is expected to be finalized in the coming weeks”.
She noted that although real GDP declined for a second year in 2010, falling by 1.4 per cent, there are some signs of a modest recovery this year.
Tourism activity has picked up in the first quarter of 2011 compared to last year, agricultural output is expected to be higher, and construction is expected to grow as some previously delayed projects start. “With growth in 2011 expected to be in the range of 1 to 1.5 percent, the authorities continue to face challenging circumstances,’ Thacker said, noting that “there are significant downside risks both from domestic and external factors”.
She said these risks stem from potential further increases in international prices of food and fuel, and a slower-than-expected recovery in advanced countries, which would affect the tourism sector and lead to a slow recovery on employment and growth.
The IMF commended Grenada’s authorities for addressing some of the structural impediments to private sector growth. (CMC)