The World Bank Board of Executive Directors approved the US$25m Grenada COVID-19 Crisis Response and Fiscal Management Development Policy Credit last week Thursday. This quick-disbursing financing will support the country’s efforts to respond to the COVID-19 crisis in the short term and enhance long-term sustainability and resilience.
“In recent years, the Government of Grenada has made significant progress on economic reforms and fiscal consolidation. The COVID-19 crisis, however, has had a disproportionate socio-economic impact on highly tourism dependent small island economies, including Grenada,” said Tahseen Sayed, World Bank Country Director for the Caribbean. “This operation aims to help Grenada weather the current crisis, support livelihoods and enhance resilience.”
The COVID-19 pandemic has hit Grenada hard. Although the number of COVID-19 cases has been relatively low, the economic contraction has been severe: GDP is projected to contract by 12 percent in 2020. This World Bank financing is expected to help the government to strengthen the country’s health systems and protect livelihoods through financial assistance to the tourism sector, the agriculture sector, and small businesses. The operation also supports the country’s medium-long term structural reforms to improve fiscal management and debt transparency, enhance climate resilience, and strengthen public accountability.
This operation builds on Grenada’s strong collaboration with the World Bank on strengthening resilience to disasters, building the Blue Economy, and further enhancing fiscal sustainability. The financing, which is from the International Development Association (IDA), is interest-free with a maturity of 40 years, including a grace period of 10 years.