[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-109802-en":3,"doc-seo-109802-105":31,"detail-sidebar-cat-0-en-105":92},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},109802,1374391974468,"Eden","https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0",8,"Research & Report","Grenada - Joint World Bank-IMF Debt Sustainability Analysis - April 2020","Grenada’s external public debt is classified as “in debt distress” because arrears to official bilateral creditors remain unresolved, even though overall debt sustainability is maintained compared with the previous 2019 analysis. The external debt risk rating rises to “high” as debt-service-to-exports thresholds are breached for 2020–2023, driven by the COVID-19 shock, including output contraction, lower tax revenues, and higher health and social spending. Recovery and the Fiscal Responsibility Law anchor a projected return to improving primary surpluses.","Public Disclosure Authorized Public Disclosure Authorized  \nINTERNATIONAL DEVELOPMENT ASSOCIATION  \nINTERNATIONAL MONETARY FUND  \nGRENADA  \nJoint World Bank-IMF Debt Sustainability Analysis  \nApril 2020  \nPrepared Jointly by the staffs ofthe International Development Association (IDA)  \nand the International Monetary Fund (IMF)  \nApproved by Marcello Estevão (IDA), Krishna Srinivasan and Craig Beaumont (IMF)  \n\n| Grenada: Joint Bank-Fund Debt Sustainability Analysis |  |\n| --- | --- |\n| Risk of external debt distress: | In debt distress 1 |\n| Overall risk of debt distress | In debt distress |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No. |\n| Macroeconomic projections | Compared to the previous DSA, there is a temporary jumpin 2020 public debt ratios (to 68.7 vs. 53.7 percent of GDP) driven by lower growth (-9.2 vs. 2.7 percent), larger fiscal deficit (2.9 vs. a surplus of 4.6 percent of GDP) and a larger current account deficit (27.4 vs. 10.2 percent of GDP). |\n| Financing strategy | The government’s medium-term debt strategy prioritizes concessional external financing. The new near-term needs of COVID-19 are being met through a combination of budget reallocations, deposits and financing from development partners. |\n| Realism tools flagged | None |\n| Mechanical risk rating under the external DSA | High |\n| Mechanical risk rating under the public DSA | High |\n| 1 Grenada ’s debt definition in the current DSA is unchanged from the previous DSA of 2019. Grenada ’s Composite Indicator score is 3.03 and its debt-carrying capacity is moderate. |  |\n\nGrenada’s external public debt is classified as “in debt distress” due to remaining unresolved arrears to official bilateral creditors of some 1.8 percent of GDP, but its debt remains sustainable, a conclusion that is unchanged from the previous DSA of 2019. The risk rating for external debt was “moderate” in the May 2019 DSA and is now “high” due to threshold breaches of the debt-services-to-exports ratio for 2020-2023, essentially due to the COVID- 19 shock. The large COVID-19 related contraction in output, decline in tax revenues, and increase in health and social expenditures would cause an uptick in the debt ratio to 68¾ percent of GDP in 2020, but the subsequent economic recovery should help reverse this rise. The underlying medium-term dynamics, being anchored by the Fiscal Responsibility Law (FRL), follow a downward path. The primary fiscal surplus is projected to increase above the FRL’s 3.5 percent of GDP floor after 2020 as the economy normalizes, anchoring debt sustainability. Medium-term financing needs are moderate and are expected to be covered by external borrowing with a substantial concessional component. Risks to these debt dynamics include the possibility of a more prolonged impact ofCOVID-19, possible delaysin the return to the FRL’s core parameters, natural disasters, and a one-off increase in debt if Grenlec-related payment obligations are met by debt issuance.  \nFully regularizing external arrears would help tangibly improve the country’s DSA rating. Arrears of 1.8 percent of GDP remain with three official bilateral creditors: Algeria, Libya, and Trinidad and Tobago. In mid-2019, Grenada signed the protocols on the consolidation of its debt to Algeria and reported submitting those documents to Algeria’s UN mission. Grenada continued making payments on outstanding fees owed to international organizations as per schedule agreed in 2017, with some EC$13.3 million in such payments made during 2019. Ongoing improvements in monitoring SOE debt, which is estimated at around 5 percent of GDP at end-2019 (excluding Petrocaribe-related obligations), should permit a broadening of the coverage of public debt, which is under consideration by the authorities. With Grenada’s Petrocaribe arrangement essentially having ceased operations since the turn of 2017-18, we are in discussions with the authorities on the status of their obligations (which","cbCairhK7j6nu122","https://ap.wps.com/l/cbCairhK7j6nu122","pdf",645368,3,1,10,"English","en",105,"# Risk assessment and classification\n## External debt distress and overall sustainability\n## Drivers of the higher risk rating\n# Macroeconomic and financing outlook\n## 2020 public debt ratio jump and macro projections\n## Medium-term debt strategy and COVID-19 financing\n# Sustainability anchors and key risks\n## Fiscal Responsibility Law dynamics\n## Potential risks to debt trajectories\n# Arrears regularization and monitoring improvements\n## Bilateral creditors and payment status\n## SOE debt monitoring and debt coverage considerations\n# External Debt Sustainability Framework\n## Baseline scenario table (2017–2038)","[{\"question\":\"Why is Grenada’s external debt classified as “in debt distress” even though debt remains sustainable?\",\"answer\":\"Because unresolved arrears to official bilateral creditors persist, while the overall sustainability conclusion remains unchanged from the 2019 analysis.\"},{\"question\":\"What caused the external debt risk rating to increase from “moderate” to “high”?\",\"answer\":\"Threshold breaches of the debt-services-to-exports ratio for 2020–2023, largely due to the COVID-19 shock affecting growth, revenues, and expenditures.\"},{\"question\":\"How is debt sustainability expected to improve after 2020?\",\"answer\":\"Economic recovery is expected to help reverse the rise in the debt ratio, and medium-term dynamics anchored by the Fiscal Responsibility Law support increasing primary surpluses above the 3.5 percent of GDP floor after 2020.\"}]","Grenada - 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