In its second review of Grenada’s economic performance, the five-member Fiscal Responsibility Oversight Committee (FROC) has reported a rebound in Grenada’s economy citing the growth in Gross Domestic Product (GDP) and the decrease in unemployment.
The report which was submitted to Parliament stated that “the government continued, throughout 2017, to put measures in place to satisfy the requirements of the FRA (Fiscal Responsibility Act) including capacity building in the Macroeconomic Policy Unit.”
According to FROC Chairman, economist Richard Duncan, the committee is satisfied with the economic context with which they operated in 2017 to confirm the data collected from the Ministry of Finance to help reach their conclusions.
Speaking with reporters at a media briefing at the Conference Room of the newly opened Parliament Building at Mt. Wheldale in St. George last Thursday, Duncan said that the drop in unemployment on the island contributed significantly to the trajectory of the economy.
However, he said that although unemployment decreased from 28.2% in 2016 to 24% in 2017, the figure is still high.
“What we speak to in the macroeconomic context is the backdrop in which things happen so there are certain amounts of consistency that what we can (live by). What we can conclude is that unemployment being in the 20% range is still high, nobody could deny that, nobody is denying that, that is has come down slightly that’s a statement of fact. In fact, we would get a better reading in the macroeconomic context because I believe the labour force survey is being conducted…
“One is not denying that unemployment is still high and hence the reason you would find that even though there is growth in the economy, the extent to which that growth is, significantly job intensive and labour intensive is what the problem has always been because coming through the last economic crisis, people been speaking for years of jobless growth where economies are growing in terms of GDP but unemployment is still high and I think that phenomena still obtains in the OECS and Grenada as well.
According to Duncan, FROC believes that the growth in the economy that is not being felt by the ordinary man in the country is due to the failure in linkages between the different sectors of the economy – tourism, construction and agriculture.
Economist with the Eastern Caribbean Central Bank (ECCB), Beverly Lugay explained to media how the linkages should take place to bring about greater impact to citizens.
She said: “In Grenada’s case we notice that the tourism, construction and agricultural sectors…these were the main sectors that drove growth in 2017…how do you strengthen linkages among those sectors?
For instance, a simple encounter in the tourism sector, we know that a lot of the times these hotels depend on agricultural products – do we have enough capacity in the agricultural sector to meet the demand of the tourism sector? So, these are some of the areas that need further enhancement…there are linkages in the tourism sector and agricultural sector so that while tourists come to Grenada and have a fantastic time, the farmers will also benefit from that…”.
According to Lugay, the same also needs to be done in relation to construction and education as the latter has to find ways to combat the problem of a lack of skilled labourers in the labour force.
The Washington-based International Monetary Fund (IMF) is projecting growth of around 3% in the Grenadian economy in 2018 and next year.