Grenada Budget Statement 2010

Preliminary estimates reveal that economic activity in Grenada contracted by 7.7 per cent in 2009 compared to real growth of 2.2 per cent in 2008.  This performance reflected declines in construction (52.4 percent), mining and quarrying (29.9 per cent), hotels and restaurants (20.8 per cent), wholesale and retail trade (17.9 percent), transport services (12.3 percent), manufacturing (11.8 per cent), government services (3.8 percent) and communications (2.0 percent).  That said, there were some bright spots. Agriculture increased by 9.3 percent, Other Services which is dominated by St. George’s University increased by 8.0 percent and Banking and Insurance increased by 8.6 percent.

Agriculture
Mr. Speaker, the growth of Agriculture in Grenada is a consequence of the hard work of our farmers supported by Government. It demonstrates that the renewed focus on Agriculture by this Administration is already bearing fruit. Areas of support last year included the farm labour, planting material and fertilizer programmes.
In 2009, nutmeg production was 739,000 pounds an increase of 22.3 per cent, cocoa production was 996,000 pounds, an increase of 33 per cent. However, fish production of 4.15 million pounds showed little change from the previous year.

Tourists Arrivals
Between January to November 2009, stayover tourist arrivals declined by 12.8% with a total of 84,240 arrivals in comparison to 96,588 arrivals for the corresponding period of 2008. All the major source markets experienced declines: United States by 1.5%; United Kingdom by 23.2% and the Caribbean by 12.6%.
It is believed that the recession experienced in Grenada’s major source markets combined with the high cost of air travel contributed to the decline in the number of stay-over visitors.
For the period January to November 2009, Cruise Arrivals totalled 276,858 compared to 227,937 for the same period in 2008, an increase of 21.5%. Similarly, cruise calls also increased by 13.5% with a total of 202 calls compared to 178. That said, it is estimated that the average expenditure of these visitors fell reflecting the global economic situation.

Projections
The Grenadian economy is projected to grow by 0.8 percent compared with a projected contraction of 2.3 percent for the ECCU.  I should note that Government’s projection is higher than the IMF and ECCB projections are a decline of 2.0% and 1.8% respectively but is based on our most recent information on the projects (public and private) which will commence this year.
source: Government of Grenada

Economic Survey of the Caribbean 2007-2008

According to the survey the economies of the ECCU continued to show positive growth for the sixth consecutive year. In 2007, preliminary data indicated that growth slowed to 5.2% from 6.3% in 2006 as many public and private construction activities geared towards the CWC were completed. In addition there was a significant contraction in the tourism sector, which actually declined by 0.6% in 2007 compared to 6% in 2006. Fuelled by hikes in oil and food prices, especially in the last quarter of 2007, the rate of inflation increased to 6.1% from 1.3% in 2006 and is expected to continue on an upward trend in 2008. Economic growth will continue to slow but remain positive in 2008, projected at 3.8%, mainly influenced by the slowdown in the United States economy and rising international oil, food and other commodity prices.

In 2007 growth was strongest in Anguilla (21%), St Vincent and the Grenadines (6.9%) and Antigua and Barbuda (6.9%) while Hurricane Dean, which struck in August 2007, negatively impacted on the growth rates of Saint Lucia (1.7% compared to 4.9% in 2006) and Dominica (1.8% compared to 3.8% in 2006). Despite the challenge of continuous volcanic activity in Montserrat, the economy grew by 2.8% compared to negative growth of 3.8% in 2006. Intermediate growth of 3% was recorded in both St Kitts and Nevis while growth in Grenada was 4.4%. The main impetus of growth continued to be the construction sector with spill over effects into mining and quarrying, transportation and communication, electricity and water and banks and insurance. Construction activity will remain robust in 2008 driven by the private sector and the Public Sector Investment Programme (PSIP). 

Economic Performance for 2007-2008

Mr. Speaker, the “new economy” of Grenada experienced real growth at an average of almost 4.0 % in the three (3) years following on the ravages of hurricanes Ivan and Emily. For this year alone, the economy grew at an acceptable rate of 3.1%--slightly below the OECS average of 3.5%.

The outlook for 2008 is for projected real growth of 4.3%. This experience of growth in the economy is reflected in the 9,400 (approximately) new jobs that were created in the period January 2005 to September 2007, impacting primarily the lives of our young people. They continue, under this Administration, to find employment and improve their lives. In the 2008 Estimates of Revenue and Expenditure, job creation will continue to receive the highest priority. In the “new economy”, Mr. Speaker, all the major sectors in the production process have experienced growth in one form or the other.

Economic Outlook for 2007

source: Grenada: 2007 Article IV Consultation—Staff Report.

Grenada’s economy has rebounded after the devastating impact of Hurricanes Ivan and Emily, with the recovery centered on reconstruction and 2007 Cricket World Cup preparations. The economic outlook is favorable, as several major tourism investment projects get underway. Inflation has been subdued. Fiscal performance, however, has been much weaker than programmed in 2006−07, owing to capital expenditure overruns. Public debt reached 125 percent of GDP at end−2006, leaving little room for maneuver in the event of exogenous shocks

Economic Statistics

Grenada: Statistical Appendix   October 30, 2008. source: IMF 

Grenada: Statistical Appendix.  September 2007.  source: IMF