Grenada

Grenada's economy grew by an estimated 4.9 percent in 2025, driven by robust construction activity, including post-Beryl reconstruction and new hotel construction, and by strong performance in agriculture. Stayover arrivals declined by an estimated 4.4 percent in 2025 following an exceptional 2024, although early data point to a rebound, with arrivals rising by 14 percent in the first quarter of 2026. Inflation continued to moderate, declining to 0.5 percent in 2025, reflecting favorable global commodity prices and the government's efforts to contain the cost of living. In the first half of 2026, inflation averaged 1.2 percent, driven by fuel and food prices.

The current account deficit widened to 24.1 percent of GDP in 2025, from 21.1 percent in 2024, driven by a surge in construction-related imports and weaker tourism receipts. The deficit continued to be financed through foreign direct investment, concessional loans, and capital transfers from the Citizenship-by-Investment (CBI) program. Remittance inflows remained stable at an estimated 3.1 percent of GDP in 2025. Poverty is estimated to have declined to 17.9 percent in 2025, from 19.3 percent in 2023 and a peak of 23.2 percent in 2020.

The fiscal position shifted to a deficit of 5.0 percent of GDP in 2025, reflecting higher spending for post-Beryl recovery. Revenues fell sharply to 33.2 percent in 2025, as CBI inflows normalized. The primary deficit, at 1.5 percent of GDP in 2025, was financed through government funds, insurance proceeds, and multilateral disbursements. The prompt deployment of post-disaster funds – including payments from the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and the World Bank’s Catastrophe Drawdown Option demonstrated the effectiveness of Grenada’s multi-layered financial resilience framework.

Public debt declined from 72.3 percent of GDP in 2024 to 70.9 percent in 2025, reflecting the limited impact of Hurricane Beryl on Grenada's debt dynamics. Although the additional financing required for Project Polaris, Grenada's flagship healthcare transformation project centered on the construction of a 250-bed climate-resilient, smart, teaching hospital, is expected to raise public debt from 71.2 percent of GDP in 2026 to 72.3 percent in 2028, debt is projected to decline to the Eastern Caribbean Central Bank target of 60 percent of GDP by 2035.

Growth is expected to reach 3.3 percent in 2026, driven by construction and recovering tourism flows. Growth is then projected to ease to about 3 percent in 2027 and 2028. Inflation is projected to rise to 1.5 percent in 2026, before converging to around 2.0 percent over the medium term. The current account deficit is expected to remain elevated at 19.3 percent of GDP in 2026, driven by import demand from ongoing infrastructure investments and a larger oil import bill, before declining to around 15 percent of GDP by 2028. Poverty is expected to continue its downward trend over the medium term.

Risks are tilted to the downside, including economic slowdowns in key tourist-origin countries, further oil price increases, intensified weather conditions due to El Niño, disruptions to CBI and FDI inflows, natural disasters, and delays in reinstating the fiscal rules, which were temporarily suspended after Hurricane Beryl to create fiscal space for reconstruction.

The World Bank Group (WBG) program in Grenada is currently concentrated in climate and disaster resilience, energy security, financial sector digitalization, and digital governance.

Climate and disaster resilience. Hurricane Beryl in July 2024 caused damage estimated at US$218 million, underscoring the need for climate-resilient housing and infrastructure. The First Competitiveness and Resilience Development Policy Credit with a Catastrophe Deferred Drawdown Option (Cat DDO), a US$52 million operation approved in June 2026, gives Grenada immediate access to financing once a disaster is declared, restoring the contingent credit that had been drawn down in the wake of Hurricane Beryl. It also supports reforms to water and public infrastructure management, the targeting of social safety nets, and the business environment for trade and financial services.

Energy. Grenada is part of a US$131.87 million regional project with Guyana and Saint Lucia to retrofit approximately 500 public buildings with energy-efficient technologies and rooftop solar panels, reducing energy consumption by at least 20 percent. The Caribbean Resilient Renewable Energy Infrastructure Investment Facility, a US$110 million regional initiative, finances the modernization of electricity transmission and distribution systems, including battery energy storage, and offers partial credit guarantees designed to mobilize up to US$120 million in commercial credit across participating countries.

Financial Sector Digitalization. The WBG is working towards the digitalization of Grenada’s financial sector to enhance digital infrastructure, improve operational efficiency, and promote financial inclusion. In 2025, two major banks in Grenada participated in an intensive IFC program on Digitalization (DigiLab Finance), which aims to enhance financial inclusion by helping the banks create and implement customized Digital Transformation Strategies and Roadmaps. The program helped financial institutions leverage data and technology to expand access to finance for underserved individuals and MSMEs, improve customer experience, and reduce operating costs.
The advanced program, DigiLab Data, which focuses on converting data from a technical byproduct to a strategic asset, is scheduled for October 2026, with confirmed participation once again of two key banks from Grenada.

Digital governance. The Digital Government for Resilience Project supported secure online services and the digitization of civil registries, reducing transaction times and ensuring records are preserved during disasters. Online tax services have cut the processing of VAT returns from 30 days to 2 days; an e-payment platform has been deployed, and 1,327 civil servants have been trained.

*Last Updated: October 8, 2026

Grenada’s partnership with the WBG is framed by the OECS Regional Partnership Framework (FY22–25), which takes a regional, small-state approach across six OECS members.

The Framework is organized around three high-level outcomes:

Strengthened resilience to climate change and other shocks: This outcome aims to help countries safeguard their natural resources and build resilience to climate change, by enhancing environmental protection and the response to climate change, and by improving macro-fiscal policies, debt sustainability, and public financial management.

Improved human capital and social inclusion: This outcome seeks to strengthen the health and skills of the population for greater productivity and prosperity, and to improve financial protection for the poor and vulnerable.

Enhanced competitiveness for more and better jobs: This outcome supports more and better jobs by enhancing the enabling environment for business and by increasing digital and physical connectivity for greater innovation, efficiency, and competitiveness.

The WBG will continue to work with regional institutions and leverage IFC/MIGA to mobilize private capital and de-risk priority investments—complementing public programs and advancing resilient and inclusive growth.

*Last Updated: October 8, 2026