Economic and Financial Review - June 2019

June 2019 Economic and Financial Review GRENADA

regard maybe mitigated based on a weakening global growth outlook, which could have a dampening effect on oil prices. A larger overall fiscal surplus is projected on the central government’s accounts, which is likely to support the convergence of the country’s debt to GDP ratio towards the 55.0 per cent target stipulated in the FRA. Notwithstanding the cautiously optimistic economic outlook for Grenada, there are internal vulnerabilities as well as external downside risks. Despite progress to date with economic reforms, the country remains vulnerable to the vagaries of economic, financial and environmental shocks. An inherent challenge for the domestic economy remains securing balanced and robust growth. Real Sector Developments Preliminary real sector indicators suggested that growth in the economy was fuelled predominantly by activity in the tourism industry. Value added in the tourism industry is estimated to have increased in the first half of 2019, driven mainly by the relatively strong performance of the stay- over segment. Stay–over visitors increased by 3.8 per cent to 82,385, attributable to additional airlift, intensified marketing and the hosting of various international and

regional events, conferences and meetings. The largest expansion in stay-overs arrivals were from the source markets of Canada (23.1 per cent); Europe (6.0 per cent) and the Caribbean (4.4 per cent). Of stay-over visitors from Europe, the UK market which constituted 72.0 per cent of all visitors from that source, grew by 5.8 per cent in contrast to a 0.1 per cent contraction in the corresponding half of 2018. The USA, the largest source market, registered the smallest upward movement among the major source markets, as arrivals rose by 0.3 per cent to 31,488. The positive developments in stay-overs segment were supported by marginal growth in cruise ship passenger sub-category, as the rate of increase normalized owing to the full restoration of operations of a number of northern Caribbean cruise ports that were damaged by hurricanes Irma and Maria in September 2017. Consequently, the number of cruise passenger arrivals grew by 0.4 per cent to 220,960, a deceleration from the 26.5 per cent increase in the first half of 2018. Among the remaining categories of visitors, increases were also recorded in the number of yacht passengers (3.7 per cent) and excursionists (27.0 per cent) respectively. Consequently, total visitor arrivals rose by 1.4 per cent to 319,063,

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Eastern Caribbean Central Bank