Annual Economic and Financial Review -December 2018

2018 Annual Economic and Financial Review

GRENADA

Outlook

(28.9 per cent), fish (27.4 per cent) and fruits and vegetables (0.3 per cent) while receipts for nutmeg fell by 12.7 per cent. The receipts from manufactured exports rose by 10.3 per cent ($3.4m), attributed mainly to higher earnings from animal feed (18.0 per cent), other manufactured products (55.1 per cent). Meanwhile, receipts from flour exports contracted by 14.2 per cent. Travel receipts are estimated to have risen by 10.1 per cent to $437.9m, an acceleration from the rate of growth of 6.8 per cent recorded in 2017. This development mirrored the significant growth in both stay-over visitors (10.0 per cent) and cruise ship passengers (14.5 per cent). Commercial banks’ transactions resulted in a net outflow of $164.3m in short-term capital, compared with one of $67.9m during 2017. External inflows to the central government rose by $67.2m per cent to $112.7m, owing to the receipt of loan funds from the World Bank at very concessional terms and the Caribbean Development Bank. Meanwhile, external outflows rose further to $96.6m from $90.3m in 2017, as the government continued its efforts to restructure and repay outstanding debts. Consequently, the central government recorded a net inflow position of $16.1m from a net amortization position of $44.8m in 2017.

Economic activity in Grenada is expected to remain strong in 2019, increasing at a similar rate as in 2018. Growth will be driven by developments in the construction, hotels and restaurants, and education sectors . The construction sector is expected to maintain its robust momentum as works continue on some private sector tourism related projects as well as public sector projects. In the public sector, new projects expected to come on stream during the year include the Climate Resilient Water Sector Project, rehabilitation of the Maurice Bishop International Airport, Retrofitting of the Hillsborough Heath Center and the Princess Royal Hospital in Carriacou, among others. The tourism industry will be buoyed by intensified marketing; the rehabilitation of existing room stock and the construction of new room stock; and increased airlift. The education sector is also expected to expand in 2019, although at a moderate pace. Positive value added is also expected in the manufacturing sector as the reintroduction of a soft drink brand strengthens output. However, challenges persist in the agricultural sector, weighing down its contribution to growth. Consumer price inflation is expected

______________________________________________________________________________ 67 Eastern Caribbean Central Bank