2023 was a record setting and breaking year for remittance inflow into Grenada, according to the Fiscal Resilience Oversight Committee (FROC) annual report which will officially be laid in the House of Representatives on 25 April 2024 by Finance Minister Dennis Cornwall.
The committee held a news conference on 23 April to discuss its work and present the 2023 annual report. Member Leon Bullen speaking on economic and social developments in the economy said that “Remittances rose by 14.7% to $208.8m as the diaspora benefitted from a robust recovery in advanced markets, especially the United States.” Bullen represents the Eastern Caribbean Central Bank (ECCB) on the committee.
In 2022 the remittance inflow was EC$161.1 million according to the 2022 annual report of the Grenada Authority for the Regulations of Financial Institutions (GARFIN), which is tasked with regulating and monitoring Grenada’s non-banking sector.
Presenting the Assessment of the External Sector, Bullen said, “On the external front, Grenada’s current account deficit is estimated to have widened by 60.7% to $589 million when compared to 2022.
“This development was mainly influenced by a 25.2% increase in the merchandise trade deficit to $1.5 billion as the economy continued to expand, amid robust growth in the tourism industry,” he said, pointing that the tourism sector is also causing an increase in the food import bill.
Bullen said rising visitor expenditures contributed to an 11.6% improvement in the services trade surplus to $1.14 billion, up from $1 billion in 2022. “Moderating the increase in this surplus was a 20.6% expansion in outflows to $208.8 million, associated with business services provided to Grenada in 2023.” These services include professional and management consulting as well as other technical and trade-related services.
The 2023 report was prepared in accordance with the Fiscal Responsible Act. The Fiscal Resilience Act came into effect on 1 January 2024.
The report points out that capital account surplus is estimated to have widened to $341.5 million, up from $128.4 million in the prior year. “This outturn was driven by flows associated with CBI-approved projects and the National Transformation Fund (NTF), which rose to $329.6 million, relative to $117.5 million in 2022. The combination of the balances on the current and capital accounts resulted in a net deficit of $247.5 million, up from $238.1 million one year earlier.”
“Funding this deficit position were net inflows on the financial account, amounting to $259.2 million, relative to the $188.6 million in 2022. Foreign direct investments would not have been negatively impacted by the coordinated increase in interest rates across most advanced economies, posting growth of 5.6% to $394.7 million, compared with $373 million in the prior year,” said the report which is based on data reflective of up to September 2023.
