Grenada’s legal framework for business is strong. The country is a parliamentary democracy, has a functioning court system, relatively low crime rates, and no political violence. The presence of a comprehensive investment incentive regime, stable economy, existing trade agreements, and responsive investment promotion experts contribute to a healthy and attractive investment climate.
Grenada’s economy continues to recover from the devastating 13.8 percent decline in GDP in 2020 due to the global COVID-19 pandemic and its monumental impact on the country’s tourism-driven economy. The tourism sector improved significantly during the first nine months of 2022 compared to 2021, however, the economy still lags 2019 figures. January-September 2022, there were increases in tourist arrivals from Grenada’s largest markets – the United States and Canada by 55 percent and 20 percent, respectively, compared to pre-pandemic levels. Stayover arrivals increased by 306.6 percent at the end of September 2022 compared to 2021. Since 2020, the small island developing state has contended with macroeconomic instability from a loss in government revenue, jobs, airlift, increased inflation, and supply chain disruptions because of Russia’s war of aggression against Ukraine which also threatens food security.
In 2021, real output expanded by 4.7 percent driven by recoveries in the tourism, construction, agriculture, and fishing sectors. GDP growth continued through 2022 at an estimated 6 percent, predominantly driven by economic activity in the tourism, construction, wholesale, and retail trade sectors. Inflation continues to climb in part due to fuel and food prices on the international market, but the country’s financial sector is stable with reports of increased deposits and loans. Public finances increased throughout 2022 with an expanded primary surplus and a decline in public debt. According to reports from the Eastern Caribbean Central Bank (ECCB) and IMF, in 2022 an average growth of 8.8 percent is estimated for the CARICOM region with an average growth within the Eastern Caribbean Currency Union (ECCU) economies estimated at 7.0 percent. With average medium-term growth rates forecasted at 4.9 and 4.4 percent for CARICOM and the ECCU, Grenada’s medium-term growth is projected to be on par with regional peers.
A new government won election in June 2023 and prioritized health and wellness over the next five years. The Government of Grenada also has a strong interest in improving education, agriculture, food security, the marine economy, the physical and digital infrastructure, the creative economy, energy transition, and the environment. Other international investments in Grenada include projects in construction, manufacturing, retail, duty free outlets, and agriculture. Parliament continues to review legislation governing value added tax, property transfer tax, investment, excise tax, customs service charges, and bankruptcy and insolvency. The government has an innovative investment incentives regime, which assists with streamlining bureaucratic and legal processes to increase the attractiveness of FDI and improve the ease of doing business in Grenada. This regime ensures transparency, equitable treatment of investors, and adherence to the rule of law, thus bolstering Grenada’s marketability as an investor-friendly climate.