by Linda Straker
- Despite increases from revenue collection agencies, Government received fewer grants than anticipated
- July total Grants $7.3 million less than target
- $17.8 million Capital Expenditure in July 2024
The passage of Hurricane Beryl on 1 July did not reduce Government’s revenue. Instead, there was an increase of EC$38 million more than projected. According to the July 2024 fiscal report, the Current Revenue for July 2024 was $141.5 million, which was $38 million more than the 2024 target, and $33.9 million more than the collections for July 2023.
Recently published on the Finance Ministry website, the July 2024 fiscal report stated that despite the increase in revenue from the various revenue collection agencies, Government received fewer grants than anticipated.
“Total Grants in July 2024 amounted to $1.8 million which was $7.3 million less than the target and $1.2 million less than the actual in July 2023,” said the report which points out that total Current Expenditure, excluding total Principal Repayments for July was $65.2 million which was $13.6 million less than the $78.8 million targeted.
Government, according to the report, recorded an increase in Capital Expenditure in July 2024, $17.8 million. This was $1.6 million more than the amount spent in July 2023, but well below the $36.4 million targeted for July 2024. The report also showed that a Primary Balance (including Grants) of $62.8 million was recorded for July 2024, which was $62.2 million more than the month’s target and $27.9 million more than the amount recorded in July 2023.
“The Primary Balance, year-to-date, was $278.7 million, which was $196.5 million more than targeted and $48.1 million more than the amount recorded for January to July 2023. The Overall Balance, year-to-date, was $251.3 million, far exceeding the $53.2 million targeted for the period. Total Principal and Interest Payments year-to-date were $95.2 million and $27.4 million, respectively,” the report explained.
Despite not experiencing reduced revenue immediately following the passage of Hurricane Beryl, as of 6 September, Grenada activated the suspension law of the Fiscal Resilience Act (FRA) which provides for the finance minister to suspend the requirements for public debt target and primary balance rule during a fiscal year when the condition for suspension is applicable.
Besides triggering the FRA suspension clause, Grenada also triggered its hurricane clause with an international agreement because of the hurricane devastation caused. Grenada’s 7% Bonds due in 2030 with the code ISIN: USP48863AE77 will experience a deferral payment because of Hurricane Beryl.
According to a statement on the Ministry of Finance website, “Grenada has elected to make a Deferral Claim as a result of the Event. As the Modelled Loss is greater than US $30 million, the Deferral Dates as a result of the Event include each of the next 2 consecutive Payment Dates following the submission of the Deferral Claim.” The payment dates fall on 12 November 2024 and 12 May 2025.
“The portion of a Deferred Payment Amount that is comprised of interest will be converted into principal on and with effect from the relevant Deferral Date. Where such interest is converted into principal, the principal amount of the Debt Securities shall be increased in the amount of such deferred interest,” the statement further instructs.
Total Principal Payments on Debt for July 2024 were $8.8 million, while Interest Payments totalled $2.5 million. Total Principal Payment is the sum of Domestic and Foreign Payments.
What exactly is a “grant” as opposed to “revenue”?