Economic and Financial Review - June 2019

G R E N A D A

Overview

The pace of economic growth slowed in Grenada in the first half of 2019, relative to the corresponding period of 2018. Gains in the tourism industry provided the major impetus for overall growth, albeit moderated by declines in activity in the construction, manufacturing and agriculture sectors. The consumer price index fell by 0.3 per cent, on an end of period basis. Anchored by the continued implementation of the Fiscal Responsibility Act (FRA), the central government recorded a higher overall fiscal surplus. The total outstanding public sector debt fell at the end of June 2019, relative to the level at the end of December 2018. Banking sector developments included increases in net foreign assets, liquidity and

monetary liabilities, while domestic credit declined further. In the latter six months of 2019, the economy is expected to maintain the growth momentum observed in the first half of the year albeit at a decelerated pace. On the upside, a sustained global economic expansion provides the backdrop for positive domestic developments in relation to further strengthening of activities in the tourism industry and some recovery in construction activities. Inflationary pressures are likely to emerge, reversing the deflationary pressures registered in the first half of the year. Global energy and commodity prices could increase slightly based on recent heightening of geopolitical tensions in the major oil producing region. Risks in this

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Eastern Caribbean Central Bank