WASHINGTON, DC – Despite the significant challenges faced by Grenada and St. Vincent and the Grenadines and their dependents following the devastating impact of Hurricane Beryl, the International Monetary Fund (IMF) is projecting positive economic growth for both territories in the current fiscal year.
This optimistic outlook is largely attributed to positive trends in the tourism sector and an upsurge in construction activities, which are expected to play pivotal roles in the countries' recovery efforts. Both sectors are set to be key drivers as these territories rebuild from the widespread damage caused by Hurricane Beryl, which made landfall as a major Category 4 storm.
Impact of Hurricane Beryl
Hurricane Beryl, which developed rapidly from a tropical storm, made landfall on July 1 as a powerful Category 4 hurricane on Carriacou, Grenada, before strengthening further to a Category 5 storm. The hurricane caused loss of life and extensive damage to homes and public infrastructure, prompting both Grenada and St. Vincent and the Grenadines to highlight the severe impacts of climate change and the urgent need for rebuilding.
The IMF reported that while full damage assessments are still ongoing, initial estimates suggest that physical damage in Grenada alone amounts to over 16% of its Gross Domestic Product (GDP). This figure reflects "substantial damage to infrastructure and housing as well as significant losses in agriculture and fisheries," according to Julie Kozack, the IMF's Director of Communication.
Economic Outlook for Grenada and SVG
Despite these challenges, the IMF remains optimistic. In responding to SKNVibes News questions on the economic outlook, Kozack noted that economic growth in Grenada is expected to remain positive in the near term, driven by post-disaster reconstruction efforts.
“Economic growth, despite all of these challenges in the near term, is expected to remain positive, and that is supported by the hurricane’s limited impact on critical tourism, infrastructure and also the beginnings of the post-disaster reconstruction,” Kozack told journalists.
The situation is similar in St. Vincent and the Grenadines, where preliminary assessments indicate losses amounting to 20–25% of GDP, predominantly in southern Grenadines. Authorities are currently using their financial buffers and receiving international support to finance post-disaster relief and reconstruction.
Despite the extensive physical damage, the IMF anticipates a relatively moderate impact on growth in 2024, as the government has swiftly initiated post-hurricane reconstruction activities.
“The authorities are drawing down their buffers and they are receiving help from the international community to finance post disaster relief and reconstruction efforts,” Kozack responded to SKNVibes News.
Calls for Global Support
In light of these challenges, regional leaders, including St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves, have criticized developed nations for their high emissions and lack of commitment to a loss and damage fund. This fund is crucial for aiding territories and countries that are disproportionately affected by climate change, allowing them to rebuild more resiliently.
Global Financial Inequities
Suriname’s President, Chandrikapersad Santokhi, highlighted the struggles faced by low- and middle-income countries in addressing climate vulnerabilities. Speaking at the United Nations General Assembly, he pointed out that these countries paid a staggering US$443.5 billion last year to cover external debts. Due to their vulnerability and lack of access to concessionary financing, they often find themselves borrowing at unfavorable terms, making it challenging to finance necessary investments in education, healthcare, and resilient infrastructure.
The IMF is expected to provide a more detailed update on the economic outlook for Grenada and St. Vincent and the Grenadines during its upcoming World Economic Outlook and Regional Economic Outlook, which will be presented at the Annual Meetings later this month.
