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Grenada Predicts Budget Surplus In 2007

by Leroy Baker, Lawandtax-News.com, New York

28 December 2006


Grenada Finance Minister Anthony Boatswain recently presented his government's budget for 2007, predicting a 10% increase in revenues and a 6% fiscal surplus as a result of strengthened revenue collection techniques.

Mr Boatswain said that it was important for Grenada to demonstrate self-reliance to the international community after the devastation caused by two hurricanes. He said that the current account surplus would be used to finance capital programmes.

For the fiscal year 2007, current revenue is estimated to be EC$441m, with current expenditure at EC$350.7m, up 6.9% on 2006. The economy grew at 1.3% in 2006.

"The rise in current expenditure is largely explained by higher anticipated outlays on wages and salaries, interest payments and current transfers. Notwithstanding these increases, the Ministry of Finance will continue its effort to exercise control on discretionary recurrent expenditure on goods and services," Boatswain said.

Earlier in the year, Grenada's Prime Minister said that the country would likely delay its entry into the CARICOM Single Market because of fears that the economy could not withstand the new tide of competition that the liberalised trading environment would bring.

"My own bet is that Grenada may not necessarily be ready because with the advent of Hurricanes Ivan (2004) and Emily (2005), Grenada would have been marginalized," Dr Mitchell told the Amsterdam News.

Grenada was devastated by Hurricane Ivan, which struck the country in September 2004. The total damage to Grenada is estimated to be in excess of EC$2.4 billion, more than 200% of Grenada’s 2003 nominal GDP. Nearly 90% of the houses in the country (approximately 28,000 houses) were damaged, of which approximately 30% were so badly damaged that they required complete replacement.

On July 14, 2005, just ten months after Ivan, as Grenada continued to rebuild, Hurricane Emily, a storm with sustained winds of 90 miles (145 kilometers) per hour, passed directly over Grenada. Emily exacerbated the severe losses suffered as a result of Hurricane Ivan and struck the few areas left relatively undamaged by Ivan. Total damages inflicted by Hurricane Emily are estimated to be approximately EC$140 million, or more than 12% of Grenada’s 2004 nominal GDP.


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