CONSTRUCTION, TOURISM DRIVE ECONOMY.

If the bottom virtually fell out of the banana industry last year, tourism and construction proved their worth in driving the Grenada economy, says the Caribbean Development Bank (CDB) in its 1997 annual report. Preliminary estimates indicate that GDP (gross domestic product) accelerated to 4.3% in 1997 from 3.4% in 1996, led by increased activity in construction and tourism:

. The unemployment rate was estimated to have fallen to 15.5%, down from 16.9% in 1996. Private and public construction activity grew by 8% in 1997, vs. 6% in 1996. A significant proportion of residential building was financed through remittances;

. Arrivals of stayover visitors grew by 2% to 91,958 during the first 10 months of 1997. The decline of 3% in visitor arrivals from the U.S. (which accounts for 27% of all stayover visitors) was offset by 11% growth in arrivals from the United Kingdom, the Caribbean Community and Canada. The number of cruise ship passengers fell by 9.8% to 180,437. The share of hotels and restaurants in nominal GDP increased from 9.4% in 1996 to 10% in 1997;

. Agricultural production remained depressed in 1997, with output falling by 2% following a decline of 3.4% in 1996, linked to poor performance of the banana and cocoa sub-sectors. The 1996 suspension by WIBDECO of banana exports from Grenada because of poor quality remained in force during 1997. Production of nutmegs increased by 10.4% to 2,237 tons during January-November 1997, vs. 1996. Grenada benefited from production shortfalls in Indonesia (which supplies 70-75% of world demand) and prices that rose from an average of US$2,144 a ton for nutmeg in 1996 to US$2,386 a ton in 1997;

. Investment by the private sector in hotel and other tourism facilities, which is ongoing and should gain momentum in 1998, is geared to expanding existing accommodation capacity (1,669 rooms in 1996) by 1,000 rooms in the medium term.