GRENADA

A Healthy Growth Rate, Combined With Reforms, Improves Economic Outlook

The Grenadian economy was able to maintain its impressive performance in 1986, achieving a healthy real growth rate of 5.5 percent. While growth is expected to be somewhat more modest in 1987, reforms have been put in place which should enable the economy to sustain a positive momentum well into the future. Among the reforms was an extensive revision of the tax system aimed, among other things, at encouraging more economically rational savings and investment decisions. Other reforms increased the role of market forces and the private sector in the country's economic life.

In 1986, American exports to Grenada increased to $20 million from $15.6 million the previous year. Grenada's few exports to the United States, on the other hand, increased only modestly to around $1 million. Major U.S. exports included food and food products, chemical fertilizers, building materials, rubber products, paper products, fabrics, oils and fats, medical instruments, and pharmaceuticals. The increasing U.S. share of Grenada's imports (from roughly a fifth to a quarter of the total) has been connected in part to the large U.S. assistance program since 1983. Nevertheless, the existence of an established network for selling U.S. goods and the familiarity with American products are advantages which, if properly exploited, could help U.S. producers maintain their impressive share in a growing Grenadian market.

Other attractive opportunities for U.S. suppliers include sporting goods and recreational equipment, particularly those related to water sports. As the number of yachts and smaller pleasure boats visiting Granada's few existing marinas increases, the demand for marine supplies and maintenance equipment is likely to pick up as well.

The Grenadian Government is exploring ways to help fishermen that may create opportunities for equipment suppliers. With greater marketing efforts, demand for refrigeration and airconditioning materials might accompany the growth in construction which is continuing at a healthy rate. Supplies and services for repair and maintenance of cisterns and swimming pools are in short supply. A franchise might be a useful vehicle for stimulating the potential markets for new construction in this area.

Suppliers of U.S. automotive parts and accessories may want to take a closer look at Grenada. The solid economic growth of the past several years combined with the large road reconstruction program has spawned an impressive increase in the number of automobiles.

A major sewage project for the Grand Anse beach area may get under way in late 1987 with USAID support, depending on the results of an environmental impact study. The engineering studies have already been contracted, but there is a possibility of goods and services contracts for supplying and laying pipe and for pumping station facilities.

For additional information on Grenada, contact the ITA country desk officer at (202) 377-2527.

COPYRIGHT 1987 U.S. Government Printing Office

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