How did Hurricane Beryl impact Grenada’s Economy?

How much did Hurricane Beryl cost Grenada? Well just about its entire economy!

Grenada’s thriving economy has been wiped out by hurricane Beryl just as the country was on a path of sustained growth.

Almost a week before Grenada suffered a devastating blow from the storm, the IMF had acknowledged that the country’s economy was experiencing a golden age. 

As a matter of fact, we wrote and recorded a while story about it, and by the time we were ready to publish, everything had changed.

Just two weeks ago, the IMF reported that Grenada’s tourism sector was booming.  They had low debt, a well-funded government, and a healthy budget surplus. Last year, Grenada’s economy grew by 4.4%, and inflation fell by 2.2% with food and fuel prices down.

That trend was expected to continue… But on July 1, Grenadians received an unfortunate shock with Beryl’s catastrophic hit! 

Preliminary reports are that the hurricane destroyed over 90% of the buildings and roads in Carriacou and Petite Martinique – two of the sister islands that comprise the State of Grenada.

But although it’s a difficult time, there are institutions helping them rebuild.

So far, they’ve secured US$44 million from the Caribbean Catastrophe Risk Insurance Facility (CCRIF).  There’s another US$5 million from the UN, and US$1 million from USAID.

Plus, right before Beryl, Grenada was basking in a surge in revenue from their citizenship by investment programme (CBI).  In 2023, the country earned over EC$382 million from the CBI.  That’s over US$140-million! 

But are these earnings enough of a buffer against the current economic challenges?

The irony is, that the IMF previously warned Grenada about depending too much on tourism and CBI income. 

They cautioned that a natural disaster could significantly impact tourist arrivals and potentially damage properties linked to the CBI program…then Beryl entered the chat.

The CBI Programme by the way, is controversial, but it’s one of the major factors behind Grenada’s success. 

The programme was established in 2013 to attract foreign investors to make a significant economic contribution to the country in exchange for citizenship. 

It offers individuals and their families the chance to become Grenadian citizens by investment in real estate or the country’s National Transformation Fund.

But like I said, it’s controversial.  A 2018 article by Reuters noted that, “For those engaged in illicit finance or other forms of illegal activity, the new passport gives them … a new identity.”

A Grenadian passport can give you visa-free entry to 130 countries, including the European Union, as long as you have a minimum US$150,000 investment.

According to Reuters, nationals of China and the Middle East are the biggest buyers of Caribbean citizenship.  But Grenadian authorities say applicants have to go through a rigorous vetting process.

While Grenada has some financial reserves, the full extent of the economic blow from Beryl remains unclear. 

The storm’s impact on infrastructure, agriculture, and tourism could significantly turn back the island’s development clock by years.

And that’s the Bottom Line.