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Grenada Country Risk Report 2017

Grenada Country Risk Report 2017

Core Views

Grenada's centre-left opposition National Democratic Congresswill likely retake power from the centre-right New National Party inthe 2018 elections, as support for the ruling NNP has declined onthe back of fiscal austerity. An NDC government will likely pursuelooser fiscal policy over the coming years, we believe that the risksof a renewed debt crisis are relatively low.

Over the next two years, the Grenadian economy will grow at a rateabove its historical average. This is thanks to a bright outlook for thetourism sector and slightly looser fiscal policy.

Tourism will continue to recover over the next decade, with growthin the US economy and parts of Europe picking up. Declining unemploymentand greater wage growth in the US, a major source oftourists to Grenada, will contribute to robust tourism flows to Caribbeandestinations in the coming years.

Major Forecast Changes

No major forecast changes


Executive Summary
Core Views
Major Forecast Changes
Key Risk
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Steady Growth On Tourism And Looser Fiscal Policy
Over the next two years, the Grenadian economy will grow at a rate above its historical average. This is thanks to a bright outlook for
the tourism sector and slightly looser fiscal policy.
Long-Term Economic Outlook
Steady Growth Ahead
Economic growth in Grenada will remain subdued over the next 10 years, though it will benefit from a stronger tourism sector. Th e
country will continue to run current account deficits, however the fiscal situation will gradually improve. While the effects of fiscal
consolidation have weighed on GDP growth, the scheduled end of austerity in 2017 will lead to an uptick in government consumption,
supporting headline real GDP growth of 2.3% over the next decad e.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 2: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Looser Fiscal Policy Will Follow Likely Opposition Victory
Grenada's centre-left opposition National Democratic Congress will likely retake power from the centre-right New National Party in
the 2018 elections, as support for the ruling NNP has declined on the back of fiscal austerity. An NDC government will likely p ursue
looser fiscal policy over the coming years, we believe that the risks of a renewed debt crisis are relatively low.
Long-Term Political Outlook
Unemployment The Key Challenge
Grenada will remain stable over the next 10 years, but will face increased political risk from public spending cuts and narcotics
transhipment. Reducing unemployment and stimulating economic growth amid a high debt load will be the government's key
challenge.
Chapter 3: Demographic Outlook
Demographic Outlook
TABLE: POPULATION BY AGE GROUP
TABLE: POPULATION BY AGE GROUP %
TABLE: POPULATION HEADLINE INDICATORS
TABLE: KEY POPULATION RATIOS
TABLE: URBAN/RURAL POPULATION & LIFE EXPECTANCY
Chapter 4: BMI Global Macro Outlook
DM Growth Peaking, But EMs Have Room To Run
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: GRENADA – MACROECONOMIC DATA & FORECASTS

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