International Monetary Fund. Western Hemisphere Dept.
This paper discusses Grenada’s Request for Disbursement Under the Rapid Credit Facility. IMF financing support provides resources to the countries’ authorities for essential health-related expenditures and income support to ease the impact of coronavirus disease 2019 on the population. The countries’ governments have responded to the pandemic by swiftly implementing containment measures, allocating scarce budgetary resources to critical health care spending, and introducing income support to the most affected sectors and households. Protection of the financial system will help cushion the economic impact of the pandemic. Measures have also been taken by the Eastern Caribbean Central Bank to facilitate the provision of credit and safeguard financial stability. Going forward, and once the current crisis dissipates, the authorities intend to push ahead with a comprehensive Disaster Resilience Strategy aimed at building resilience to natural disasters. They are also committed to further strengthening financial sector oversight to safeguard macro-financial stability.
The global coronavirus outbreak is a crisis like no other and poses daunting challenges for policymakers in
many emerging market and developing economies (EMDEs), especially where the pandemic encounters
weak public health systems, capacity constraints, and limited policy space to mitigate the outbreak’s
repercussions. A severe economic impact in the first half of 2020 is inevitable. Medium-term projections are
clouded by uncertainty regarding the pandemic’s magnitude and speed of propagation, as well as the
longer-term impact of measures to contain the outbreak, such as travel bans and social distancing. However,
most EMDEs are already suffering from disruptions to global value chains, lower foreign direct investment,
capital outflows, tighter financing conditions, lower tourism and remittances receipts, and price pressures for
some critical imports such as foods and medicines. Commodity exporters have to absorb, in addition,
a sharp decline in export prices, notably for oil. Further, in most countries, the coronavirus outbreak is
producing unanticipated health spending needs and revenue losses as activity slows. Coping with these
challenges is especially difficult for countries with limited administrative capacity, tight external financing
constraints and/or already high debt levels, and thus requires substantial support from the international