IMF Executive Board Approves US$65.6 Million in Disbursements to Dominica, Grenada, and St. Lucia to Address COVID-19 Pandemic

• The IMF Executive Board approves
  three requests from Dominica, Grenada, and St. Lucia for emergency
  financial assistance to help address the challenges posed by COVID-19.
• The approval of the Board will
  make available a combined SDR 48 million (US$65.6 million) in emergency
  financing to help these three countries deal with the challenges posed
  by COVID-19.
• IMF financing support provides
  resources to the countries’ authorities for essential health-related
  expenditures and income support to ease the impact of COVID-19 on the
  population.
• To address the pandemic, the
  authorities announced measures to help employees and households,
  including income support to the unemployed, tax relief, and providing
  cash transfers to the most vulnerable and affected.
• Dominica, Grenada, and St. Lucia
  are members of the Eastern Caribbean Currency Union (ECCU), and the
  disbursements would support macroeconomic stability and facilitate the
  subsequent economic recovery of the region.

Washington, DC –
The Executive Board of the International Monetary Fund (IMF) approved
disbursements to Dominica, Grenada, and St. Lucia following their requests
under the Rapid Credit Facility (RCF) mechanism, with a combined SDR 48
million (US$65.6 million), to help cover their balance of payment needs
stemming from the outbreak of the COVID-19 pandemic. Disbursements to all
three countries are set at the maximum available access under the RCF
instrument of 100 percent of quota for Grenada (SDR 16.4 million or US$
22.4 million) and St. Lucia (SDR 21.4 million or US$ 29.2 million), and
89.4 percent of quota for Dominica (SDR 10.3 million or US$14 million).
These countries are small states that are very vulnerable to shocks,
including large natural disasters, with Dominica in particular still
recovering from the devastation of Hurricane Maria in 2017.

The pandemic has hit these largely tourism-dependent countries very hard.
Tourism inflows essentially came to a halt in mid-March, 2020, with ripple
effects across other sectors. The closure of the borders, coupled with the
curtailment of commercial activity, has had a debilitating impact on these
economies. A drop in fiscal revenues, combined with additional direct
health and social expenditures will temporarily increase the fiscal deficit
and financing needs. IMF support will help cover some of these needs and
allow the governments to ease the impact on the population, such as
upgrading public health facilities and providing social assistance to the
vulnerable and adversely affected sectors.

Following the Executive Board discussion of the requests, Mr. Tao Zhang,
Deputy Managing Director and acting Chair, made the following statement:

“The COVID-19 pandemic poses a major challenge to Dominica, Grenada, and
St. Lucia. Their key tourism sectors have been hit hard by the shock. The
contraction in tourism is expected to have a major impact on their
economies, by causing ripple effects across all economic sectors, eroding
fiscal revenues, and creating urgent balance of payments pressures. In
addition, these three small states are also highly vulnerable to natural
disasters.

“The countries’ governments have responded to the pandemic by swiftly
implementing containment measures, allocating scarce budgetary resources to
critical health care spending, and introducing income support to the most
affected sectors and households. Protection of the financial system will
help cushion the economic impact of the pandemic. Measures have also been
taken by the Eastern Caribbean Central Bank to facilitate the provision of
credit and safeguard financial stability.

“The authorities have expressed commitment to meeting the regional debt
target of 60 percent of GDP by 2030. To this end, they plan to implement
necessary adjustment measures to rebuild policy space once the crisis has
abated, building on the progress achieved in recent years. Looking forward,
the authorities are also committed to implementing policies that support
durable economic growth and poverty reduction within a balanced development
strategy that includes comprehensive measures to boost resilience to
natural disasters.

“IMF emergency support under the Rapid Credit Facility will help fill the
three countries’ balance of payments needs and create fiscal space for
essential health expenditures, income support to workers, and cash
transfers to households. Fund financing will also help catalyze further
donor support to close the remaining balance of payments needs.

“The IMF will continue to be engaged with Dominica, Grenada, and St. Lucia,
and stands ready to provide policy advice and further support as needed.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org