Transcript CURRENT ACCOUNT

MINISTRY OF FINANCE
DECEMBER 15, 2011
1
1.To
share some initial results on Grenada’s
economic performance in 2011.
2.To
outline the broad medium term budget
framework…..
3.To
facilitate our deliberations on the current
economic situation and the way forward.
2
Purpose
Key Messages
Macroeconomic Context
Summary of the Key Economic Challenges
Significant Reforms Underway
Consolidating Economic Recovery –
Toward High & Sustained Growth
 Medium Term Budget Framework
 Main Assumptions
 Pipeline of Selected Projects






3

The global economic situation has
deteriorated and remains uncertain

Domestic economic recovery is underway but
slow; another challenging year is expected in
2012

Government is remains committed to
economic and fiscal reforms

Immediate Priorities: Consolidate economic
recovery and Pursue transformation agenda.
4

Global economic activity has weakened
and become more uneven and downside
risks are growing

Unemployment in advanced economies
remains high

Global growth will moderate to about 4%
through 2012, with growth in advanced
countries expected to expand at an
anemic pace of 1.0% in 2011 and 2.0% in
2012
5
8
6
Original
4
2
0
-2
Revised
2005
2006
2007
2008
2009
2010
2011
2013
2012
-4
-6
-8
Growth Rate
6
2008
2009
2010
2011p
2.8
-5.6
-1.4
1.0
Hotels & Restaurant
2.97
-12.25 -9.65
4.21
Agriculture
9.66
12.12
7.66
Construction
-7.04
-31.57 -6.34
-3.00
Wholesale & Retail
0.02
-16.8
-1.74
0.60
Transport, Storage & Communications
-1.98
-9.75
-4.53
2.75
Financial Intermediation
-2.17
0.73
1.58
0.52
Real Estate, Renting and Business
Activities
-0.06
-1.06
0.85
1.28
Education
15.96
5.52
1.11
1.75
Public Admin, Defense & Social Security
3.55
3.02
7.15
-0.71
Real GDP Growth
Value Added:
-6.02
7
Inflation (end of period)
8
6
4
Inflation (end of
period)
2
0
-2
2007
2008
2009
2010
2011
-4
8
Budget
2011
Est. Outturn
2011
Change
(XCD)
Central Government Finances (EC$ m)
Total Revenue & Grants
Current Revenues
Grants
501.8
454.2
47.6
481.0
420.8
60.2
-20.8
-33.4
12.6
Total Expenditure
Recurrent Expenditure
Capital Expenditure
649.7
446.0
203.7
562.4
416.5
145.9
-87.3
-29.5
-57.8
Overall Balance
-148.0 -81.3
66.7
9

Another difficult economic and fiscal year
ahead

Inflation is expected to continue on its
downward trajectory.

Growth will pickup (1.0%-1.5% in 2012).

Where will this growth come from?
Agriculture/Agribusiness, Construction,
Tourism related sectors, Education and
Financial Intermediation
10

Increased growth, employment and
poverty reduction.

Improved fiscal and debt sustainability.

Enhanced fiscal space to expand
capital expenditure in growth sectors
and social safety nets.
11

Ongoing economic reforms include
strengthening of tax administration at
Customs and IRD; Initiatives under the doing
business agenda; finalization of the GPRS,
Wastage Reduction initiatives, modalities for
faster project implementation; public debt
management.

These and other reforms are required to
strengthen the foundations of the economy
for long term growth and sustainable
development.
12

Investment should be focused on the
new drivers of Economic Growth in
the short, medium and long term:
 Tourism (Creating more Value)
 Health, Wellness and Education Services
 Energy (renewable and non-renewable)
 Agriculture/Agribusiness
 Information and Communication
Technology
 Physical Infrastructure
13
2011
Estimated
Outturn
2012
Budget
Proposal
2013
Forward
Estimates
2014
Forward
Estimates
Total Revenue & Grants
481.0
510.4
531.5
549.6
Of which: Current
Revenues
420.8
458.6
481.8
498.5
Recurrent Expenditure
416.5
456.7
468.7
491.5
Current Account Balance 4.4
1.9
13.1
7.0
Capital Expenditure
145.9
169.8
170.9
163.2
Primary Balance (b/grants)
(96.1)
(95.9)
(84.2)
(70.3)
Overall Balance
(81.3)
(116.1)
(108.1)
(104.1)
14

A pickup in economic activity over the
medium term as major projects are
implemented

Average inflation of around 2.5% over the
period

Improved revenue collections through the
rationalization of tax concessions, and
ongoing reforms at IRD and Customs

Rationalization of current expenditure and
prioritization of capital expenditure
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New Public Hospital (with teaching Facilities) – 2013
National Athletic Stadium (China) – 2012
Geothermal Project (with GRENLEC) – 2014
Wind Energy for Carriacou (EU/GRENLEC/GOG) - 2012
Regional Disaster Risk Reduction Project (WB/PPCR) –
2012
 Agricultural Feeder Roads Phase II (2012)
 Caribbean Regional Communications Infrastructure
Project (2012)
 Market Access and Rural Enterprise Development –
(2011-17)
 Parliament House (Aus/UAE) - (2012-14)
 Lowther’s Lane Government Office Complex - 2012
 Grenville Market Development (CDB) – 2011
 Venezuela Multi Project (Venezuela) – 2011
 UWI Open Campus - TBD
 Carriacou Free Port - TBD
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16
THANK
YOU!
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