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Caribbean Islands Foreign Trade and Balance of Payments
Grenada's exports of goods and services grew rapidly after
1983. The primary foreign exchange earners were agricultural
products and tourism, which together accounted for 85 percent of
all goods and services sold to foreigners in 1985. Revenue from
tourism was US$23.8 million, slightly higher than earnings from
agriculture, which reached US$20.1 million; clothing and other
exports amounted to US$1.8 million.
Leading agricultural exports were fresh fruits and cocoa, which
accounted for 52 percent of total merchandise exports. Nutmeg,
bananas, and mace followed, capturing a total of 40 percent of
total goods exported. Textiles accounted for only 3 percent of
merchandise sent abroad. Miscellaneous items composed the remaining
5 percent.
Grenada's chief export markets were Western Europe, Caricom,
the United States, and Canada. Western Europe accounted for 52
percent of Grenada's exports in 1984, most of which went to
Britain. Caribbean countries provided markets for approximately
one-third of Grenada's exports; Trinidad and Tobago imported the
most. The United States and Canada absorbed 6 percent and 2
percent, respectively.
Food consistently composed 25 to 30 percent of the island's
imports from 1979 to 1983. Other significant items purchased abroad
during this period were machinery (15 to 20 percent), fuel (10 to
15 percent), manufactured goods (10 percent), and other
miscellaneous manufactures (10 percent).
The principal sources of imports were the Caricom countries,
Britain, the United States, Canada, and, more recently, Japan.
Caricom economies provided nearly one-third of Grenada's imports
during the 1980s; oil from Trinidad and Tobago accounted for twothirds of Caricom imports. Manufactured goods and machinery
generally came from the United States and Britain, whereas Japan
furnished many of Grenada's automobiles.
Imports of goods and services exceeded exports in 1985, causing
a deficit in the current account of US$29.4 million. Historically,
Grenada has had a nearly offsetting surplus in the capital account
in the form of public borrowing or official foreign government
grants.
Imports of goods and services increased in 1984 and 1985
because of greater demand for food, fuel, and manufactured goods,
which contributed to the 1985 current account deficit. The United
States provided over US$20 million in direct grants to Grenada in
1984 and 1985 to offset the deficit. This aid gave Grenada a
positive overall balance of payments and allowed it to make
substantial repayments to the International Monetary Fund (IMF--see Glossary) and the ECCB. Grenada still maintained a foreign debt of
US$48 million in 1985, which represented 92 percent of exports.
Debt service payments were US$8.3 million, or 16 percent of
exports.
Informed observers expected Grenada's current account deficit
to hover around US$30 million at least through 1990, in spite of
the expectation that exports would more than double in this period.
Plans called for Grenada to replace foreign grants with private
investment to maintain a positive overall balance of payments,
provided that tourism and agriculture continued to grow at
anticipated levels.
Data as of November 1987
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