November 3, 2015
Ms. Christine Lagarde
International Monetary Fund
Washington, D.C. 20431
Dear Madame Lagarde,
Grenada has continued the steadfast implementation of its Homegrown Programme. We have met all quantitative performance criteria and have made progress to restore fiscal and debt sustainability.
In 2015, we expect to achieve the first primary surplus in a decade, while completion of a comprehensive debt restructuring will result in a major reduction in the stock of Grenada’s public debt. Substantive legislative reforms have helped to overhaul Grenada’s fiscal policy framework and, with the ongoing fiscal consolidation, Grenada is cementing a return to sustainability and growth.
We are excited about shifting now to a new phase of reform that will reinforce the macro gains achieved, while advancing reforms to raise productivity, strengthen external competitiveness, and boost employment and growth. Our Government remains fully committed to the programme objectives and is looking forward to following through on the reform agenda.
We request modifications to performance criteria to align the existing adjustor for debt restructuring costs (floor on primary balance and ceiling on primary spending) with updated cost estimates and to include the existing adjustor on the indicative ceiling on the net change in central government and central government guaranteed debt for the reimbursement of CLICO and BAICO policyholders on the floor on primary balance and the ceiling on primary spending to ensure consistency across fiscal performance criteria.
On the basis of our performance under the programme thus far and our commitment to continued implementation of the programme, our Government requests that the Executive Board of the IMF complete the third review of the arrangement under the ECF and the financing assurances review, as well as approve the proposed new performance criteria for December 2016, the propose modifications to performance criteria, the proposed structural benchmarks, and the fourth disbursement under the arrangement of the equivalent of SDR 2 million.
We are confident that the policies described in the attached MEFP will serve to achieve our programme’s objectives. However, if necessary, our Government stands ready to take any additional measures that may be required.
We will consult with the Fund on the adoption of such measures and in advance of revisions to the policies contained in the MEFP, in accordance with the Fund’s policies on such consultation.
Our Government will also provide the Fund staff with all the relevant information required to complete programme reviews and monitor performance on a timely basis.
We consent to the publication of this letter, and its attachments as well as the related staff report.
Dr. The Rt. Hon. Keith C. Mitchell
PRIME MINISTER AND MINISTER OF FINANCE