Dominica: 2018 Article IV Consultation-Press Release and Staff Report
IMF Staff Country Reports, September 5, 2018
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- Dominica: 2018 Article IV Consultation-Press Release and Staff Report
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Bibliographic details
- Published: September 5, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484374788.002
Summary and key findings
- In 2018, Dominica’s output is projected to decline by 14 percent.
- The output shortfall is expected to take about 5 years to recover to pre-hurricane levels.
- The fall in output and government revenue, coupled with increased expenditure for rehabilitation and reconstruction, will lead to a substantial worsening of fiscal and external deficits.
- Signs of recovery, particularly in construction and the public sector, have already started to emerge.
Economic projections and recovery timeline
- Output: projected decline of 14 percent in 2018.
- Recovery horizon: about 5 years to return to pre-hurricane output levels.
- Sectoral note: early signs of recovery are concentrated in construction and the public sector.
Fiscal and external impact
- Revenue: government revenue is falling as a result of the output decline.
- Expenditure: increased spending for rehabilitation and reconstruction is adding fiscal pressure.
- Balance effects: combined revenue loss and higher reconstruction expenditure will substantially worsen fiscal and external deficits.
Risks to the outlook
- Fiscal constraints: the budget could become financially constrained and unable to sustain adequate investment given high debt, limited buffers, weak revenue, and urgent needs for reconstruction spending.
- Financial stability: risk of financial instability stemming from undercapitalization of systemic financial institutions.
- Natural disasters: recurrent natural disasters present a material downside risk to the outlook.
- Competitiveness: external competitiveness challenges constitute an additional risk.
Subject areas and keywords (as listed)
- Subjects: Credit bureaus, Economic sectors, Environment, Expenditure, Financial markets, Natural disasters, Nonperforming loans, Public debt, Public sector
- Keywords: Caribbean, category 5 Hurricane Maria, cost, costs of reconstruction, CR, Credit bureaus, director, Dominica, Global, ISCR, Natural disasters, output collapse, Public sector, recovery spending, vulnerability to natural disasters, zoning regulation
Content in this bundle
- Country Report