Grenada’s fiscal pulse is showing signs of strain as government earnings plunged in the first half of 2025, igniting concern over the island’s economic resilience and its dependency on high-yield, low-volume revenue streams.
Data from Grenada’s Ministry of Finance reveals that total revenue and grants for January to June fell to EC$627.7 million — a stark EC$112.6 million drop from the same period in 2024. The plunge is not only numerical; it underscores the fragility of key funding mechanisms that Grenada has leaned on in recent years.
The Investment-for-Citizenship Model Stumbles
One of the loudest alarm bells came from a sharp decline in non-tax revenue — specifically, Grenada’s controversial Citizenship by Investment (CBI) programme. The initiative, which trades passports for foreign capital, netted EC$40.5 million in June 2024. A year later, that number collapsed to just EC$10.5 million. The fall exposes the vulnerabilities of leveraging citizenship as a fiscal instrument, especially amid rising international scrutiny and global instability.
June Paints a Bleak Picture
For June 2025, the government’s current revenue stood at EC$93.8 million. While this figure narrowly beat its monthly target by EC$1.9 million, it still trailed last year’s June collection by EC$21.4 million — a deficit that can’t be ignored. Property taxes also dipped, compounding the revenue pressure.
On the grant side, the government recorded EC$6.5 million, exceeding projections. However, these grants remain relatively marginal in the broader revenue matrix and offer little relief against the revenue cliff.
Spending Discipline vs. Economic Demand
Expenditure restraint appears to be Grenada’s current line of defense. Current spending for June 2025 came in at EC$71.4 million, which was EC$10.2 million below target. However, capital expenditure bucked the trend — surging to EC$45.3 million, a substantial overshoot of the EC$29.6 million target and a 73% year-over-year jump. This suggests that while the government is cutting back operational costs, it is aggressively investing in infrastructure or long-term projects — possibly to stimulate growth or absorb political pressure.
Primary Balance in the Red
The country’s primary balance (which excludes interest payments but includes grants) sank into deficit territory. June’s shortfall reached EC$14.8 million — missing target by EC$3.7 million and marking a sharp decline from the EC$22.3 million surplus recorded in June 2024.
Year-to-date, the primary balance has worsened to minus EC$11.7 million, a decline of EC$230.5 million compared to the same six-month window last year. The silver lining, if any, lies in the fact that this is still significantly better than the projected deficit of EC$55.2 million for the period.
Debt Payments Stay Modest
Debt servicing in June 2025 totaled EC$3.7 million, comprising EC$2.1 million in principal repayments and EC$1.6 million in interest. These figures remain relatively manageable — but with a contracting revenue base, even modest obligations carry heavier weight.
Final Thoughts: The Clock Is Ticking
Grenada now stands at a fiscal crossroads. The heavy reliance on programmes like CBI, combined with falling tax receipts and heightened capital spending, places pressure on the state to either find new revenue sources or risk widening the deficit further.
