Dominica 2011 Article IV Consultation

Recent Developments and Outlook.
The economy is recovering, but the outlook remains weak, both in the short and medium
term. Economic Growth turned positive in 2010, but the economy is still to show firm signs
of recovery and faces headwinds from the recent cancellation of a cruise-ship line
that accounted for a significant share of tourist arrivals......

Inflation
The recent surge in food and fuel prices has not yet translated into higher inflation as of February 2011, with headline inflation hovering around its long-term historical average of 2 percent.......
source: International Monetary Fund

National Investment Strategy and Action Plan. July 2010

source: Invest Dominica Authority(IDA)

Commonwealth of Dominica. Diaspora Policy 2010

It is with regard to realizing the potential for investment, trade and skills transfer that most
regions have been strengthening links with their Diaspora populations. For, while remittances have contributed to poverty alleviation, foreign exchange earnings and balance of payments support, to date there has been no definitive evidence that they have propelled output growth. It has been argued that, while remittances have in some cases been used to set up micro businesses, they have tended to encourage high consumption.......
source: Ministry of Trade, Employment, Industry and Diaspora Affairs

Dominica doing better than OECS neighbours

June 4 2010
AMIDST the global economic crisis, the island of Dominica has been identified as the most resilient in the Eastern Caribbean.  
more.....

IMF Executive Board Concludes 2010 Article IV Consultation with Dominica.

May10 2010
The global downturn has adversely affected the Dominican economy through lower tourism arrivals, foreign direct investment inflows and remittances, although less severely than other Eastern Caribbean Currency Union (ECCU) economies. Real Gross Domestic Product is estimated to have declined by only 0.3 percent in 2009.....
source: IMF

Energy Development Programme for Dominica. 2009

Dominica has no natural petroleum resources. Only a small local market; resulting in high cost of electricity and fuel – economies of scale issues.
Dominica's reliability and efficiency of the current electric system and public  transportation is extremely limited. However, Dominica possesses considerable natural resources to:
• provide for its energy security with a combination of renewable energy
technologies –hydro, wind, biomass, geothermal, and solar – and increased energy
 efficiency; and
• generate foreign exchange earnings.
source: Renewable Energy Programme of Dominica

Economic Survey of the Caribbean 2007-2008

According to the survey the economies of the ECCU continued to show positive growth for the sixth consecutive year. In 2007, preliminary data indicated that growth slowed to 5.2% from 6.3% in 2006 as many public and private construction activities geared towards the CWC were completed. In addition there was a significant contraction in the tourism sector, which actually declined by 0.6% in 2007 compared to 6% in 2006.  Fuelled by hikes in oil and food prices, especially in the last quarter of 2007, the rate of inflation increased to 6.1% from 1.3% in 2006 and is expected to continue on an upward trend in 2008. Economic growth will continue to slow but remain positive in 2008, projected at 3.8%, mainly influenced by the slowdown in the United States economy and rising international oil, food and other commodity prices.

In 2007 growth was strongest in Anguilla (21%), St Vincent and the Grenadines (6.9%) and Antigua and Barbuda (6.9%) while Hurricane Dean, which struck in August 2007, negatively impacted on the growth rates of Dominica (1.8% compared to 3.8% in 2006) and Saint Lucia (1.7% compared to 4.9% in 2006) . Despite the challenge of continuous volcanic activity in Montserrat, the economy grew by 2.8% compared to negative growth of 3.8% in 2006. Intermediate growth of 3% was recorded in both St Kitts and Nevis while growth in Grenada was 4.4%. The main impetus of growth continued to be the construction sector with spill over effects into mining and quarrying, transportation and communication,
electricity and water and banks and insurance. Construction activity will remain robust in 2008 driven by the private sector and the Public Sector Investment Programme (PSIP). 

Economic Performance

• Dominica: 2008 Article IV Consultation. Source: IMF
  Dominica is extremely vulnerable to exogenous shocks, and recent economic policy has been aimed at creating buffers against such events. The economy is susceptible to a variety of natural disasters, and is ranked 12th on the list of 111 countries on the Commonwealth Secretariat/World Bank’s composite vulnerability index. The economy is also sensitive to external economic developments such as the global slowdown after September 11, 2001. The crisis in 2002 was also precipitated, however by lax fiscal policy, as inefficiencies in the tax system magnified the revenue impact of weaker activity. In contrast, the current slowdown finds the economy with slightly more fiscal room to maneuver due to a lower debt burden and greater flexibility from structural reforms.
  
• Sourced from 2006/07 Budget, Eastern Caribbean Central Bank 2006 Review

Proficient regulations of fiscal and macro-economic structural framework made Dominica achieve a better real growth rate of 3.5% in the fiscal year of 2005/2006. Agriculture, Tourism, Construction and Manufacturing were the thriving sectors that also assisted in sustaining this economy.

Favourable whether conditions led to an increase in the production of bananas by 1.1%; whilst the expansion of Melville Hall airport, eco-tourism and public sector activity, proved to be highly significant to the enhanced performance of the construction sector in 2006. Though visitor arrivals may have contracted for the year, there was an increased value in the tourism sector (due to higher tourist spending from paid accommodation), hence improving the sector’s GDP contributions.

The government’s theme for the 2006/07 fiscal year is to intensify and encourage a better environment for business investment. This strategy, coupled with the high profiled PRGF(Poverty Reduction and Growth Facility) funded by the IMF could establish the Dominican government as an OECS success case in the near future.

The IMF’s PRGF objectives are to make lending (for poverty reduction and growth) more central to poor or low-income countries; after key measures and structural reforms are identified by a country’s PRSP (Poverty Reduction Strategy Papers), then the IMF prepares the targets and policy conditions for that particular country to be supported by a PRGF program. The facilitation of the poverty reduction (three 3-year) program was given to Dominica in 2003. Following the concluding assessment of the PRGF for 2006, IMF officials commended the Dominican authorities on the precise implementation of the economic program, which saw economic activity in most sectors expanding. Moreover, the strong fiscal performance for 05/06 fiscal year illustrates the government’s commitment towards medium-term sustainability of public finances and debt.

• Invest Dominica Authority: Investment Information

A complete country profile which includes the economic, social and political aspects of Dominica's investment portfolio.