The Washington-based International Monetary Fund (IMF) has once again expressed concerns over the high level of unemployment in Grenada.
In its latest bulletin on the performance of the island’s so-called self-imposed Structural Adjustment Programme to cure a fiscal deficit, the Fund said that “unemployment remains elevated” in the Spice Isle.
Both the ruling New National Party (NNP) and the main opposition National Democratic Congress (NDC) continue to trade words on the unemployment rate in the country.
The Keith Mitchell-led administration has put unemployment at 29% of the workforce while Congress maintains that it is higher and keeps growing.
The cash-strapped government in St. George’s has been forced to turn to the IMF and the World Bank for assistance as Grenada in 2013 was forced to default on debt payments due to a host of commercial creditors for loans that were borrowed at high interest rates.
The fund has helped the island to broker a deal with the commercial creditors in which the Mitchell government would have to start making payments on the outstanding loans from next year.
As a public service, THE NEW TODAY reproduces in full the latest report put out by the Fund on the situation in Grenada:
The Executive Board of the International Monetary Fund (IMF) has completed the second review of Grenada’s economic performance under a three-year program supported by an arrangement under the Extended Credit Facility (ECF).
The completion of the review enables the disbursement of SDR 2 million (about US$2.8 million), bringing total disbursements under the
arrangement to SDR 6.04 million (about US$8.5 million).
The ECF arrangement in the amount equivalent to SDR 14.04 million (then about US$21.7 million, or 120 percent of Grenada’s quota at the IMF) was approved by the Executive Board on June 26, 2014.
Following the Executive Board’s discussion on Grenada, Mr. Min Zhu, Deputy Managing Director and Acting Chair, said:
“The Grenadian authorities have achieved important results in the context of their Fund-supported economic program. Fiscal targets have been exceeded, important reforms of the fiscal policy framework have been put in place, and significant progress has been made in restructuring public debt. Stronger economic activity has supported program implementation, although unemployment remains elevated.
Maintaining social cohesion and support from all stakeholders remains critical to completing the reforms and putting Grenada on a higher, sustainable, and more inclusive growth path.
“Grenada is well advanced in its ambitious fiscal adjustment and in restoring debt sustainability. Safeguarding the fiscal performance achieved thus far and carefully monitoring budget execution will help achieve this year’s fiscal objectives. A final round of adjustment will be needed, as planned, to achieve the program’s fiscal targets for 2016. An agreement on debt relief with the remaining stakeholders will be necessary to return public debt to a sustainable level.
“Recent reforms to the fiscal policy framework are a major step forward to promote durable fiscal discipline and support debt sustainability over the medium-term. The comprehensive reforms include the introduction of fiscal responsibility and public debt management legislation, and reforms of the tax incentive regime and of the framework governing state-owned enterprises and other parastatal entities.
“In the context of the exchange rate peg, continued structural reforms are needed to strengthen competitiveness and boost potential growth. These reforms should focus on lowering production costs, including in the energy sector, and improving the investment environment. Strengthening social protection programs should aim at promoting inclusive growth.
“Good progress has been achieved in advancing the regional strategy to strengthen the banking system, coordinated by the Eastern Caribbean Central Bank. Full implementation of the strategy will be essential to preserving financial stability.”