The members of the Fiscal Resilience Oversight Committee (FROC) share in the anguish brought about by the devastation caused by Hurricane Beryl, and has engaged the Government on matters that fall under the ambit of the Fiscal Resilience Act.
The FROC, as part of its monitoring function, targeted the issue of its “Statement of Compliance” based on the fiscal outturn as of 30 June 2024. The statement will not be issued in light of the disruption caused by Hurricane Beryl. The FROC noted that, as of 30 April, the fiscal outturn was more favourable than targeted. Additionally, based on the IMF statement, the fiscal outturn for 2024 was projected to be better than budgeted as follows:
The clearing of the large backlog of CBI applications from the recent surge is projected to result in a large 2024 budget surplus of 9.5% of GDP and further accumulation of government deposits.
(Grenada Staff Concluding Statement of the 2024 Article IV Mission, 20 June 2024).
The FROC therefore concludes that as of 30 June 2024, the fiscal outturn was projected to be more favourable than budgeted, and within the parameters of the Fiscal Resilience Act.
With the impact of Hurricane Beryl, the Government now has to manage a process of recovery, rebuilding, and reconstruction. For 2024, this will require a revision of the 2024 national budget and the Medium-term Fiscal Framework. Thereafter, the Medium-term Economic and Fiscal Strategy Report will have to be prepared to accommodate priorities that emerged as a result of the hurricane.
The FROC is guided by the Fiscal Resilience Act (2023). With reference to developments related to Hurricane Beryl, the Act makes provision for activating the Suspension Clause in the event of a natural disaster.
Additionally, the need for a Supplementary Appropriation Bill coincides with the time for the preparation of the Medium-term Fiscal Framework as stipulated in the Public Finance Management Act as amended. The fiscal impact of the supplementary budget will determine whether there is a need to activate the Suspension Clause.
In keeping with its legislated mandate in Section 12 of the Fiscal Resilience Act, the FROC will undertake the following:
- provide a written assessment to the Ministry of Finance on the draft of the medium-term fiscal framework prepared in accordance with section 12 of the Public Finance Management Act
- no later than two weeks after the approval of any supplementary budget, prepare and lay before the House of Representatives for consideration, a statement on the impact of the supplementary budget on the compliance with the fiscal rules and targets in this Act
- where an Order under section 9 has been made, prepare and lay before the House of Representatives a written assessment on the compliance with this Act and the adequacy of the measures proposed to facilitate compliance with the public debt target and primary balance rule at the end of the suspension; and
- advise on measures that ensure compliance in accordance with the provisions of this Act. The Fiscal Resilience Oversight Committee continues to monitor the fiscal outturn and the developments in the economy. In so doing, the FROC will review reports on the impact of Hurricane Beryl, the policy responses by the Government and the reports as stipulated in the Fiscal Resilience Act and the Public Finance Management Act
For further information contact the FROC via email at [email protected] or telephone 1 473 458 8085 or through our PO Box 3477. Follow the Fiscal Resilience Oversight Committee Facebook and LinkedIn pages.
Laurel Bain
Chairwoman, Fiscal Resilience Oversight Committee
