IMF Reviews Grenada Economy

Mike Godfrey, Tax-news.com, Washington

27 March 2001

The International Monetary Fund (IMF) is currently visiting Grenada to conduct its annual review of the country's economic performance known as an Article IV consultation. A team of four members, led by Michael Costa, is due to meet with representatives from various private and public sector financial institutions.

In last year's review of Grenada the IMF found that real GDP growth, which was negligible during in the early 1990s, rose to an average of 3½ percent a year in 1995-97, and accelerated to around 7-8 percent in 1998-99. This was, according to the IMF, based on the implementation of 'large infrastructural projects, and a pickup in demand in the agriculture, manufacturing, construction, and services sectors — particularly tourism, communications and financial services.'

In the financial sector, last year's review praised the Grenada International Financial Services Authority which opened for business just a few months before the review was conducted. The authority closely monitors the operations of offshore companies. In addition, anti-money laundering legislation came into effect in April last year, work on the legislative and regulatory framework for a regional capital market for ECCB member countries was in the process of being finalized, and a regional stock exchange was about to begin operations in July 2000. As the timing of the review (it was conducted in July 2000) prevented it from fully investigating the effect of the ECCB capital market rules and the stock exchange on the economy, the Grenada government is now likely to be hoping for a favourable report.

The IMF team is expected to present its findings to Prime Minister Dr. Keith Mitchell and Minister of Finance Anthony Boatswain on March 30.

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