Despite defaulting on a whopping debt of EC$2.5 billion, and its Structural Adjustment Programme (SAP) laced with severe austerity measures, Grenada has the best performing economy in the member states of the sub-regional grouping known as the Organisation of Eastern Caribbean States (OECS).
That’s the verdict of Minister of Economic Development, Oliver Joseph who was addressing members of the local media at Tuesday’s weekly post-Cabinet Press Briefing held at the Ministerial Complex.
The Member of Parliament for St. David said that high performance in Agriculture, Tourism and Medical Education contributed to growth in Grenada’s economy, enough for the Eastern Caribbean Central Bank (ECCB) to brand the island as the best performing economy in the ECCU.
“Last year tourism was 16.8%, this is the highest in CTO (Caribbean Tourism Organisation) and now it is showing trends that it would grow higher than 16.8%. Agriculture, we have seen increase in export, through the Marketing and National Importing Board,” he told reporters.
According to Minister Joseph, there was a decline in the economy between 2009-2012 when the National Democratic Congress (NDC) was in power and the island registered growth in the 2014/2015 period under the Keith Mitchell-led administration.
“To compare the negative growth between 2009 to 2012 to what we are seeing now and the best performing economy in the region, we are very proud to have taken the economy in that state to where it is today… that is what the IMF was complementing Grenada for,” he said.
He boldly stated that unemployment is on the decline as measured by the Labour Force Survey, which was conducted in 2013 and 2014.
Minister Joseph pointed out that the current Government inherited a 40% rate of unemployment when it came into office in 2013 and by 2014 it was down to 29.5%.
“You would recall that when we came into office in February (2013), the Government was selling assets to pay salary, that is the worst situation you can ever reach in – we have to sell our assets to pay salaries. That is what we inherited, and a deficit of 18 million dollars … the (NDC) Government was collecting an average of 35 million and spending 53 million… that is really unsustainable, no economy, no household, no business could continue like that,” he remarked.
The senior government minister stressed that Grenada, under the NNP regime, has been recognised for its ability to collect taxes from citizens.
“We were at 19% in the Eastern Caribbean Currency Union in 2013. Now we’re at 21% and that is expected to grow this year, so we are collecting more money in taxes due to the Government. The monthly shortfall, which I mentioned, was 18 million, for the first quarter that went to 6 million dollars.
“…In 2014 for the first time in a long long time …the Government collected more revenue than was projected in the budget and so because we are collecting more money we still have a fiscal deficit so we are not in a situation where we want to be yet. We (have been) able to pay salaries on time every month since coming into office, pay up to 15 million dollars in back pay to public servants and pensioners.
“…We were able to maintain all public officers in their position – in other words no retrenchment has taken place. Income tax (was) removed from persons receiving NIS pension so that they can have more disposable income.
Minister Joseph emphasised that the austerity measures taken by Government were done to ensure that the economy is on the right track.
Since taking office just over two years ago, the Mitchell-led administration has introduced a number of taxes including a widening of the income tax, as well as doubling of the Property Tax, and significant increases for government services.
After defaulting for two years on debt payments to U.S bond holders, the regime signed off on an agreement to start paying on the outstanding millions from early next year.