Grenada: Government Anticipates FRA Escape Clause Will Also Be Triggered In 2025

Grenada’s Finance Minister, Dennis Cornwall, has announced that the Government anticipates the Escape Clause of the Fiscal Resilience Act (FRA) will continue for the year 2025, given that the Government will still be recovering from the impact of Hurricane Beryl.
Addressing the opening ceremony of the Ministry of Finance budget retreat on Tuesday, September 24, 2024, Cornwall announced that the Escape Clause of the FRA, which went into effect on September 6, will be significant for Grenada’s recovery.
As of September 6, 2024, Grenada activated the suspension law of the Fiscal Resilience Act, applicable for the fiscal year January to December 2024, which provides for the suspension of the requirements for public debt target and primary balance rule during a fiscal year when the condition for suspension is applicable. However, the finance minister has now noted that a further suspension will be required in 2025 as recovery and reconstruction efforts accelerate.
That said, the FRA makes provisions for the Ministry of Finance to take certain responsibilities if the suspension order is published in the first half or second half of any given year. The legislation states that when the suspension order is published within the second half of the year, “the medium-term economic and fiscal strategy report accompanying the national budget for the new fiscal year shall include the measures proposed to facilitate compliance with the public debt target and primary balance rule in the new fiscal year, including the size and nature of the revenue and expenditure measures for the national budget for the new fiscal year.”
Cornwall told participants attending the retreat that the Government’s priority will be building resilience in the aftermath of Hurricane Beryl and its focus must remain steadfast. “Accordingly, the 2025 budget should prioritise anything that elevates health, education and social welfare. By investing in our people, we are laying the groundwork for a fair and a more prosperous Grenada,” he said, pointing out that each programme should be designed to enhance the quality of life of citizens and address critical local needs with compassion.
“We should continue our efforts to diversify our economy. Our focus for 2025 should be on us presenting a dynamic and competitive economy while showing that our infrastructure can withstand the challenges that are caused by climate change and other extreme weather events.”

(Source: Now Grenada)