As of December 31, 2023, Grenada’s public debt stood at EC$2,155.6 billion, accounting for 59.1% of the Gross Domestic Product (GDP) as per data released by the Ministry of Finance.
Overall, the government’s debt experienced a slight increase of 0.7% from the previous quarter and 3.9% from the same period in 2022, primarily due to disbursements on existing external loans.
During the fourth quarters of 2022 and 2023, domestic debt decreased while external debt increased. Domestic and external debts constituted 18.8% and 81.2%, respectively, of the total central government debt by the end of 2023, according to the Public Debt Bulletin. The government’s debt was EC$0.8 million in the fourth quarter of 2022 and the third quarter of 2023.
The total Central Government debt at the end of 2023 was EC$2,155.6 million or 59.1% of GDP, according to the Public Debt Bulletin published on April 10, 2024.
The bulletin highlighted that there was no government-guaranteed debt by the end of 2023 as the state-owned enterprise holding government debt underwent debt restructuring, rendering the loan nonexistent.
The Marketing and National Importing Board (MNIB), the sole State-Owned Enterprise holding government debt in the past year, had its debt restructured by the government, along with facilitated payments to the entity’s suppliers. Consequently, there were no government loans by the end of the fourth quarter of 2023.
In July 2023, the International Monetary Fund (IMF) noted that Grenada remained in public debt distress due to longstanding unresolved arrears to official bilateral creditors totaling about US$37.6 million (3.1% of GDP) as of the end of 2022.
Despite this, public debt was deemed sustainable at the time, reflecting favorable projected debt dynamics driven by substantial fiscal surpluses supported by the return to fiscal rule in 2023. The IMF attributed the rise in public debt to 71.4% of GDP in 2020, from 58.5% in 2019, to the Covid-19 pandemic.
The IMF forecasted a further decline in public debt to GDP ratio for 2023, with the rebound of tourism, offshore education sectors, and construction activity, which resumed its pre-pandemic downward trend in 2021, reaching an estimated 64.6% of GDP in 2022.
The IMF emphasized the need for continued adherence to the fiscal responsibility framework and regularizing arrears to maintain a sustainable debt trajectory and upgrade the risk rating. While the public debt-to-GDP ratio remained below its threshold under the baseline scenario, the present value of the external debt-to-GDP ratio and the external debt service-to-revenue ratio marginally exceeded the thresholds, as per the July 2023 report.