The COVID-19 pandemic threatens the economic expansion and changed the outlook for Grenada. Economic output collapsed by 11.2% in 2020 after seven consecutive years of growth. Measures taken to restrict the spread of COVID-19 contributed to this decline. Unemployment rose but average inflation remained subdued.

Fiscal balances turned negative and debt levels increased as revenues dropped, and public expenditures rose to help mitigate the economic and social fallout of the pandemic. The banking sector remained well capitalised even as the crisis placed banking systems under stress. The external current account deficit deteriorated, as export income shrank and imports fell. The medium-term outlook is cautiously optimistic amidst heightened downside risks.