WASHINGTON (CMC) – The International Monetary Fund (IMF) is providing Grenada with US $2.9 million after the island completed the first review of its economic performance under a three-year programme supported by an arrangement under the Extended Credit Facility (ECF).
The IMF said that the successful completion of the review enables the disbursement of US $2.9 million, bringing total resources made available to Grenada under the arrangement to US $5.9 million.
Grenada has an ECF arrangement in the amount of US $21.7 million which was approved in June this year.
IMF managing director Min Zhu said the Grenadian authorities are implementing their Fund-supported economic programme with great resolution.
“Fiscal consolidation is underway, structural reforms are advancing, and negotiations with creditors on public debt restructuring are progressing. While the economy is showing signs of recovery, it remains subject to significant risks. Continued strong commitment to the programme, supported by all stakeholders, will be critical to boost Grenada’s growth prospects.”
He said that immediate priorities are to restore fiscal and debt sustainability, and bolster competitiveness. The planned fiscal consolidation will help meet the fiscal objectives for 2014-15, while protecting the most vulnerable.
“However, continued adjustment effort and strong implementation is needed to achieve the programme’s primary surplus targets. In addition, a comprehensive restructuring of public debt will be essential to return public debt to sustainable levels.”
The IMF official said that reforms to the institutional framework for fiscal policy will be critical to support sound policies, going forward.
“Priority should be given to implementing the new public financial management legislation, introducing fiscal responsibility legislation, finalising reforms of public institutions outside the central government, reforming the tax incentive regime, introducing a framework for sustainable management of citizenship-by-investment receipts, and improving the tax and customs administration,” he added.
Zhu said the legislative underpinnings of the authorities’ growth-enhancing strategy have been put in place.
But he noted that stronger reforms will be needed to improve competitiveness and longer-term prospects.
“A focus on the implementation of the investment framework and on the reform of the regulatory framework for the energy sector could yield important gains. Social protection programmes should also be strengthened to ensure more inclusive growth.
“Advancing the regional strategy to strengthen the banking system, coordinated by the Eastern Caribbean Central Bank, remains essential to securing financial stability and efficient intermediation,” the IMF official warned.