Economic Outline

flag Grenada Grenada: Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to adress the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The country relies on tourism and revenue generated by St. George’s University as its main source of foreign exchange. However, the government has been working on expanding its sources of revenue, including by the creation of the citizenship by investment program, which produced a resurgence in the construction and manufacturing sectors of the economy. In 2020, Grenada suffered one of the sharpest contractions in its economic history, due to the COVID-19 pandemic. According to IMF estimates, GDP growth contracted by -13.1%, mainly due to international travel restrictions. The economy rebounded only marginally in 2021 with an estimated growth of 2.7% but it is expected to accelerate to 6.2% this year and 5.8% in 2023 as the global sanitary crisis ends and tourism revenues gradually pick up (IMF).

According to the IMF, gross debt reached 70.2% in 2021 (from a pre-pandemic level of 60.6%) and is expected to follow a downward trend this year, totalling 69.4% before declining further to 65% in 2023. The government budget is structurally positive: it recorded a surplus of 2.6% of GDP in 2021 and is forecast to reach 3% by 2023. After recording negative inflation in 2020 (-0.7%), the rate picked up to 2.5% last year amid higher global energy and commodity prices. The IMF expects inflation to slow to 0.6% this year before picking up again in 2023 (1.2%). Even though Grenada is always at risk of natural disasters such as hurricanes, the country hasn't been hit by any hurricanes in fifteen years, making it one of the Caribbean countries with the lowest risk of being affected by such disasters. As a result, Grenada's economic situation tends to be more stable than those in risk areas, where natural disaster damage can have a huge economic impact.

In the 2022 budget statement, the unemployment rate was reported at 16.6% at the end of June 2021, declining from 28.4% in June 2020. At the end of the same period, youth unemployment stood at 38.6%. The island’s structural weaknesses include an external competitiveness gap, and a weak business environment and labour market. Also, groups such as farmers are exposed to limited education and severe damage derived from weather conditions.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 1.19e1.03e1.081.161.25
GDP (Constant Prices, Annual % Change) 0.7-13.1e2.76.25.8
GDP per Capita (USD) 10,6089,1309,57510,19410,878
General Government Balance (in % of GDP) 4.03.3e2.62.53.0
General Government Gross Debt (in % of GDP) 60.671.3e70.269.465.0
Inflation Rate (%) 0.6-0.72.50.61.2
Current Account (billions USD) -0.20-0.23-0.25-0.24-0.20
Current Account (in % of GDP) -17.0-22.2-22.8-20.6-15.9

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
East Caribbean Dollar (XCD) - Average Annual Exchange Rate For 1 MUR 0.080.080.080.080.07

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Value Added (in % of GDP) 4.9 13.4 67.9
Value Added (Annual % Change) -12.2 -12.8 -9.3

Source: World Bank - Latest available data.

 

Learn more about Market Analyses about Grenada on Globaltrade.net, the Directory for International Trade Service Providers.

 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Sources of General Economic Information

Main Online Newspapers and Portals
Now Grenada
Grenada Chronicle
Grenadia Newspapers
Useful Resources
Ministry of Finance
Ministry of Trade, Industry, Co-Operatives & CARICOM Affairs
Official Government Website
Eastern Caribbean Central Bank
 
 

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Latest Update: May 2022