IMF Staff Conclude Mission To Grenada

by Mary Swire, Tax-News.com, Hong Kong

06 April 2009

The International Monetary Fund (IMF) has revealed the findings of a recent mission to Grenada.

Leading the mission was Catherine Pattillo, who explained:

“An IMF mission visited Grenada during March 16-25 to conduct discussions for the third review of the government’s home-grown economic program that is supported by the IMF’s Poverty Reduction and Growth Facility (PRGF)."

"The mission had a constructive dialogue with Prime Minister Tillman Thomas, Finance Minister Nazim Burke, Permanent Secretary Timothy Antoine and other senior government officials, and representatives of public enterprises and the private sector. Staff from the Caribbean Development Bank (CDB) and the Eastern Caribbean Central Bank (ECCB) participated."

"Discussions focused on recent economic developments, fiscal performance, progress with the government’s economic and structural reform agenda, and a policy framework for the remainder of 2009 taking into account the deteriorating global environment."

Explaining the findings of the mission, Ms Pattillo continued:

“The mission agreed with the government on the importance of a more focused fiscal program in 2009 to address the adverse effects of the global economic slowdown. Given Grenada’s high public debt burden, which constrains the ability to respond to exogenous shocks, placing debt firmly on a downward path must remain the priority, particularly through determined efforts at fiscal consolidation."

"The mission welcomed the planned introduction of the VAT on February 1, 2010, which will lay the foundation for a broader tax base that will enhance revenues. Following the completion of the tax amnesty, the authorities plan appropriately to enhance the use of tax enforcement measures."

“The authorities have also made some progress with structural reforms to support improved economic management, and promote a foundation for broad-based growth. A Debt Management Unit was established in the Ministry of Finance in January 2009 and it is expected to improve the effectiveness of and develop a strategy for debt management," she added, continuing:

"The new draft Investment Act is in the final stages of review, which will provide a transparent and level regime for domestic and foreign investors and replace tax holidays with investment allowances."

Concluding the findings, Ms Pattillo said:

“Overall, the government has made significant efforts to strengthen implementation of the economic and structural reform program supported by the PRGF arrangement. The mission welcomed the authorities’ commitment to addressing the challenges of the adverse external environment, and to strong and sound economic and fiscal management."

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