Economic Impact Of Covid-19 Will Flip Grenada's Fiscal Balance Into Deficit In 2020

• Prior to the Covid-19 pandemic, Fitch Solutions expected the Grenadian government would regularly run budget surpluses and remain committed to its Fiscal Responsibility Law (FRL), which has been in place since 2015 and targets bringing public debt below 55.0% of GDP.
• However, the agency now expects a fiscal deficit of 2.4% of GDP in 2020, from a 4.1% surplus in 2019, as restrictions on domestic commerce and government stimulus measures cause the first budget shortfall in five years.
• Grenada’s historic recession, which is forecasted at 13.7% y-o-y in 2020, will significantly undermine government receipts from tourism and other service sectors.
• While high-frequency data are not available to highlight the diminished activity, Prime Minister Keith Mitchell’s government enacted a strict stay-at-home order from March to May and closed the international airport to international flights from March until August.

(Source: Fitch Solutions)