Home » Grenada’s Economic Performance After 50 Years of Independence! An Urgent Need to Spice Up and Spread Economic Growth?

Grenada’s Economic Performance After 50 Years of Independence! An Urgent Need to Spice Up and Spread Economic Growth?

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On behalf of The UWI and the UWI Five Islands campus let me take this

opportunity to wish the people of Grenada, Carriacou and Petit Martinique (Grenada)

best wishes on the occasion of their 50 th anniversary of independence. Grenada is my

favourite Caribbean island and some of my favourite humans live there. I am taking the

opportunity of the 50 th anniversary of independence to provide a brief analysis of the

economic performance of Grenada since independence. In the short space provided by

a newspaper article I will focus on two economic variables, Gross Domestic Product per

Capita and Growth in Real Gross Domestic Product. I am able to access an

independent, credible and continuous series of data from the World Bank for the period

1978 to 2023 for these variables and the analysis will be based on this time period

which excludes the first four years of independence. Of course, economic growth,

national and social development is a complicated issue and many other indicators and

variables will matter for a more comprehensive analysis.

Income & Wealth Since Independence

Gross Domestic Product (GDP) is the total market value of all the goods and

services a country produces in a period of time. It is meant to reflect the market value of

goods and services produced in a country during a period of time and by extension the

total amount of income earned in the country during that period of time. When GDP is

divided by the population we get GDP Per Capita which is the average income per

person in Grenada for a period of time. Since 1978 Grenada has seen a massive

explosion in GDP Per Capita from US $912 in 1978 to $9,689 in 2023 as shown in table

1. The figures imply that whereas in 1978 Grenadians had an average income of $204

EC per month or $2,448 EC a year, that has expanded to$2,155 per month or $25,860

EC per year by 2023, which represents a tremendous improvement in material living

standards. GDP Per capital is an average across the entire population and of course in

reality many people in Grenada earn more than this and many earn less, but it gives us

an average picture and we can track that average over time. We do not have any data

on income distribution in Grenada which is extremely important in tracking economic

progress because while average income can grow most of that growth can be within

certain groups leaving a lot of the population behind. An analysis of income distribution

in Grenada sounds like a perfect research project for some Grenadian graduate

students to undertake at the UWI Five Islands campus.

An analysis of the trends in GDP Per Capita in Grenada shows a massive surge

in the immediate post-independence period and GDP per capita more than doubled

during the 1978 to 1987 decade. However, it is clear that after this period the growth in

GDP Per capita has been quite modest and especially weak since 2008. Even though

the growth rate would have been affected by the mathematical fact that GDP would then


be growing from a larger base, the 33% increase in the decade 2008 to 2017 is most

anemic compared to the 113% growth in the decade 1978 to 1987 (see table 2). In

addition to the slowing growth, Grenada’s improvement in GDP Per Capita since

independence lags behind a number of its Eastern Caribbean Currency Union (ECCU)

counterparts as shown in table 1. To further delve into the factors behind the trends in

GDP Per capita we turn our focus to the growth in GDP itself.

A country’s GDP Per Capita as mentioned earlier is its GDP divided by its

population. Grenada’s population has been relatively stable over the years since

independence therefore the trends in Per Capita GDP are largely driven by the growth

in GDP, therefore we now shift to focus on the growth in Real GDP. Real GDP is where

GDP is adjusted to remove the effects of inflation. As seen in table 3 economic growth

in Grenada averaged 3.06% per year over the 1978 to 2023, which is the second lowest

among the major economies in the ECCU. Over the 46 year period the economy grew

by a combined 140%, again the second lowest among the major economies in the

ECCU. The 1978 to 1987 and 1998 to 2007 stand out as two periods of strong and

sustained growth in Grenada since independence and account for 67.2% of the growth

achieved between 1978 and 2023 over the last 50 years (see table 3).

Over the 1978 to 2023 time period Grenada experienced 10 recessions (years of

negative GDP growth) which was the second largest number of recessions among the

major economies in the ECCU. Economic recessions in Grenada have tended to be

associated with hurricanes or external shocks such as the Gulf War (1991), September

11 terrorist attacks (2001), Sub-prime Mortgage Crisis (2008/2009) and the Covid 19

pandemic (2020) (please see table 5 for details). However, with the exception of the

recession following the 2008 global financial crisis and the Covid 19 pandemic,

recessions in Grenada have tended to be short and mild.

The major challenge for Grenada appears to be the relatively modest levels of

growth achieved in non-recession years and the vulnerability to external shocks which

then reverse the moderate gains made in the non-recession years. The factors behind

Grenada’s relatively weak economic growth in non-recession years (compared to other

major ECCU economies) and weak growth since 2008 despite its many assets, need to

be researched and form the basis for future policy initiatives (again this seems like a

perfect project for some bright graduate students from Grenada to undertake at the UWI

Five Islands campus). The evidence may also suggest an urgent need to find new

avenues to “spice up” GDP Per Capita as the current model appears to have stalled,

unable to create significant new wealth and facilitate catching up with other major ECCU


Policy Challenges Next Fifty Years

Firstly, Grenada needs to invest in building up policy buffers especially in the

form of a Debt to GDP Ratio of 60% to minimize the negative effects of the inevitable

external shocks. Secondly, policy makers need to focus on improving the ease of doing


business, the efficiency of public services, improving physical and human capital and

removing obstacles in the way of the entrepreneurs and investors who can identify and

execute the new growth opportunities needed to “spice up” the rate of economic growth

and to build up reserves for the inevitable bad years from hurricanes and/or external

shocks. Thirdly, in pursuing new growth opportunities policymakers should prioritize

inclusive growth opportunities so that new wealth is generated that is spread across a

broad cross section of the society.

Prof. C. Justin Robinson (Professor of Finance and Principal, UWI Five Islands Campus, Antigua &



Table 1. Gross Domestic Product Per Capital 1978 – 2023 (US $)

1978 2023 % Change $ Change

Antigua and Barbuda $ 1,366 $ 19,919 1358% $ 18,553

Dominica $ 788 $ 8,351 959% $ 7,562

Grenada $ 921 $ 9,689 951% $ 8,767

St. Kitts and Nevis $ 1,137 $ 20,262 1682% $ 19,124

St. Lucia $ 1,400 $ 13,030 830% $ 11,630

St. Vincent and the

Grenadines $ 572 $ 9,125 1493% $ 8,552


Source: World Development Indicators


Table 2: Grenada’s Growth In Per Capita Income Across Decades

Time Period Cumulative Real GDP Growth

1978 to 1987 113%

1988 to 1997 58%

1998 to 2007 63%

2008 to 2017 33%

2018 to 2023 10%

Table 3. Annual Growth Rate In Real GDP ECCU (%)


Ant & B Dom Gre SKN SLU SVG

Annual Average 3.64 2.31 3.06 3.79 3.33 3.19

Max Annual 12.71 13.38 13.28 11.18 11.18 14.07

Min Annual -17.50 -18.36 -13.76 -14.53 -24.37 -4.47

Cumulative (1978 to 2023) 167.63 106.34 140.73 174.20 153.01 146.53

# of Recessions 9 11 10 7 9 5

GDP Losses From

Recessions -48.87 -50.85 -32.05 -25.60 -36.69 -11.44


Table 4. Grenada Cumulative Real GDP Growth by Decade


1978 to 1987 45.54

1988 to 1997 22.60

1998 to 2007 49.17

2008 to 2017 17.75

2018 to 2023 5.67


Table 5. Annual Growth Rate in Real GDP




Real GDP

Growth Year


Real GDP

Growth Year Real GDP Growth

1978 5.34 1993 -1.96 2008 0.95

1979 5.60 1994 1.69 2009 -6.61

1980 -0.53 1995 2.13 2010 -0.51

1981 1.53 1996 4.44 2011 0.76

1982 4.12 1997 5.02 2012 -1.15

1983 3.63 1998 11.75 2013 2.35

1984 3.57 1999 6.90 2014 7.34

1985 5.98 2000 4.89 2015 6.45

1986 7.19 2001 -2.02 2016 3.74

1987 9.10 2002 3.44 2017 4.44

1988 2.97 2003 9.46 2018 4.36

1989 3.77 2004 -0.65 2019 0.68

1990 4.01 2005 13.28 2020 -13.76

1991 1.39 2006 -4.00 2021 4.69

1992 -0.85 2007 6.12 2022 5.80

2023 3.90

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