Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

GRENADA

salary increase was given to public servants along with a one-off payment of a maximum of $750 as compensation for the sacrifices made during the home-grown structural adjustment programme. These payments amounted to approximately $7.3m. Preliminary results of the second quarter 2018 Labour Force Survey indicated an unemployment rate of 20.6 per cent, a decline from the rate of 23.6 per cent at the end of 2017. Based on general economic trends, it is assumed that the downward movement in the unemployment rate was attributable to job creation mainly in the tourism and construction sectors. Fiscal policy in Grenada in 2018 continued to be guided by the targets embedded in its Fiscal Responsibility Act (FRA). All the fiscal targets were met during the period under review. This included the wage bill, the primary surplus and the primary expenditure targets. The operations of the central government resulted in an overall surplus of $136.9m (4.2 per cent of GDP), an increase from the overall surplus of $91.6m (3.0 per cent of GDP) in 2017. This outturn was 71.4 per cent above the 2018 National Fiscal and Debt Developments

Budget Estimates and Expenditure and reflected a better than anticipated revenue performance along with lower capital expenditure.

A primary surplus of $202.8m (6.2 per cent of GDP) was registered, up from $172.6m (5.7 per cent of GDP) in 2017, far exceeding the target of a minimum of 3.5 per cent of GDP. The overall surplus was partly used to reduce debt levels and augment the contingency fund. This laudable performance mirrored enhanced compliance, greater enforcement by the revenue collection departments and containment of discretionary expenditure. A current account surplus of $137.2m (4.2 per cent of GDP) was realized, which was an increase from the surplus of $94.2m (3.1 per cent of GDP) posted in 2017. Growth

______________________________________________________________________________ 62 Eastern Caribbean Central Bank