We have reports the International Monetary Fund (IMF) has kicked off its technical assistance programme, which will support Grenada in amending and improving its Fiscal Rules Framework.
A planning meeting in this regard is to be held tomorrow.
A stronger Framework is aimed at supporting fiscal robustness and improve resilience to climate change and other economic shocks.
A release says the strengthening of the Fiscal Rules Framework also underscores the Government’s commitment to economic and social transformation in what’s considered to be a fiscally responsible way.
REPORT:
The IMF’s Technical Assistance is expected to address what the administration deems excessive fiscal rules in the Fiscal Responsibility Act, resulting in overlap and inferior fiscal outcomes (such as large primary surpluses but below-budgeted capital expenditure).
Also, what the FROC Committee and stakeholders see as the Rigidity of the Primary Expenditure Rule, which does not support adequate spending and investment in resilience-building infrastructure and other capital expenditure.
Among other things a release speaks of ambiguity with the medium-term debt anchor and the transition period towards the medium term debt target, as well as inconsistency in the definition of public debt vis-à-vis the definition in the Public Debt Management Act.
Concern is also being raised about ambiguity with the frequency of activation of the Escape Clause and the contents and timing of the Recovery Plan and what’s said to be definitional issues and inconsistencies with other Legislations.
The scope of the IMF’s technical support will focus, in broad terms, on undertaking analytical work and making recommendations to the Government for improving the Framework.
The IMF Technical Assistance Mission is tentatively carded for April 10 to 14 (virtually) and in-person from April 17-25, which will include broad-based consultations with government and non-government stakeholders.
