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Economic Outlook

Economic Outlook

Grenada’s short˗to˗medium-term economic prospects are positive. Real GDP growth (at market prices) is projected to average 4.0 percent over the period 2019-2021. Growth will be carried by public infrastructure development. Major public sector projects include the Airport expansion project carded to commence in 2019, Phase Two of the Parliament Building, as well as projects under the UK-Caribbean Infrastructure Fund. Growth will also be buoyed by performances in the construction and Tourism sectors, which are expected to remain relatively strong.

Meanwhile, inflation is estimated to edge up in the short term on account of rising international oil prices, but it is expected to moderate over the medium term with expansions in global oil production. Price increases are expected to continue over the medium term, with inflation averaging 2.4 percent. The unemployment rate is expected to continue declining with increased economic activity, but it is likely to remain in double digits until reforms to address structural rigidities take root. Fiscal performance is expected to improve further in the short˗to˗medium-term, with continued fiscal prudence, consistent with the rules-based fiscal framework as prescribed by FRL. As an upshot of the expected fiscal improvement, public debt is projected to fall below its FRL’s target of 55.0 percent of GDP by 2020. Table 9 is a summary of projections for key macroeconomic variables.