St. Vincent and the Grenadines set to receive US$11.6M in Disaster Funding – CARICOM Business

FILE PHOTO: Ash from the eruptions of the La Soufrière volcano covers a town in St Vincent and the Grenadines. (Photo by BajanPro via UN News)
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St Vincent and the Grenadines is slated to receive a disbursement of US$11.6 million after the IMF under the Large Natural Disaster Window (LNDW) of its Rapid Credit Facility (RCF) approved its application for emergency financing assistance.

The fallout from both the ongoing volcanic eruption and the COVID-19 pandemic is estimated to cause economic losses amounting to around 30% of GDP as infrastructure, housing and crops are damaged. The economy is estimated to have contracted in 2020 by 3.8% as tourism activity fell 70%.

While considerable uncertainty about the evolution of the eruption remains, IMF staff estimate the infrastructure damage to exceed 20% of GDP and for the economy to contract by 6.1% in 2021, with agriculture and related sectors severely affected. A drop in fiscal revenues, combined with additional social, clean-up and reconstruction expenditures, will increase the fiscal deficit and financing needs

Extract from CARICOM BUSINESS Vol 4 No 26

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