The Government of Grenada on Wednesday received high commendation for prudent fiscal management from Deputy Managing Director of the International Monetary Fund, Mr. Tao Zhang who is currently visiting the country.
At a luncheon hosted by the Government, Mr. Zhang said Grenada has recorded significant breakthroughs in its economic challenges.
“Grenada’s authorities have done remarkable things in bringing down debt and leaving better public finances for future generations. These important gains are a national asset and a product of the hard work of all Grenadians. They deserve to be protected.”
The IMF official noted that the policy of fiscal discipline instituted by the current administration, supported by the Fiscal Responsibility Law, helped to break a pattern of high debt and low growth.
He said, “The fiscal adjustment helped cut the deficit by almost 10 percent of GDP. It also helped reduce public debt from 108 percent of GDP in 2013 by more than 40 percentage points by now.”
Mr. Zhang further stated that contrary to popular belief, the significant fiscal adjustment did not negatively impact output.
“Growth in Grenada has averaged 5 and a half percent annually. This compares favourably with other countries in the ECCU and the Caribbean. Crucially, the Government’s strong efforts received broad backing from domestic stakeholders through a negotiated social compact.”
Notwithstanding these positive developments, Mr. Zhang said there is need to focus on building resilience.
“The focus on post-disaster recovery should be supplemented with better all-around preparedness. The experience with hurricanes in the region continues to highlight the need to build more resilient infrastructure and have resources to address problems immediately.”