Economic Growth In Grenada Set To Recover More Notably In 2023

• Fitch forecasts real GDP growth will slow to 3.5% in 2022 in Grenada. Not only is this down from a 6.6% forecast for 2022, but it also represents a downturn from the estimated growth of 5.6% in 2021 and comes in below the average growth of 3.9% registered from 2015 to 2019.
• Elevated inflation will weigh on real household disposable incomes in Grenada in the coming months, dragging on private consumption growth. In addition, inflation will rise from an estimated average of 1.2% in 2021 to 6.0% in 2022, reflecting the impact of elevated global oil prices. 
• Fitch expects that the tourism sector will be a key driver of growth in 2022, but will remain far off a full recovery from the pandemic. Furthermore, elevated inflation in key source markets -the United States (7.7% in 2022), the UK (9.0%), and Canada (7.0%) - which together normally provide around 80.0% of Grenada's arrivals - will prevent a more notable recovery in the sector.
• Tourism accounts for 80.0% of exports in Grenada, with below-trend arrivals and a higher energy import bill set to increase the negative contribution of net exports to growth. Over 25% of employment in Grenada comes from tourism, and Fitch anticipates that high unemployment will prevent a larger uptick in consumer spending. 
• However, several factors will prevent a larger slowdown in economic activity in 2022, including an absence of domestic COVID-19 restrictions which should allow commercial activities to run largely as normal. 

(Source: Fitch Solutions)