Dominica: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Dominica
IMF Staff Country Reports, June 27, 2024
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- Dominica: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Dominica
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Bibliographic details
- Published: June 27, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400281334.002
Macroeconomic performance and outlook
- Real gross domestic product grew by 5.6 percent in 2022 and an estimated 4.7 percent in 2023, returning to pre-pandemic output levels.
- The ongoing economic expansion provides an opportunity to rebuild essential buffers and reorient policies toward increasing prospects for more sustained and resilient growth.
- Inflation has subsided from its 2022 peak.
- External imbalances have deteriorated modestly.
- The outlook is subject to downside risks, especially from climate change, volatile tourism receipts, commodity prices, and CBI revenues.
Fiscal position and public finances
- Policy responses have eroded essential fiscal buffers, despite large Citizenship by Investment (CBI) revenues, which have supported reconstruction, infrastructure development, and climate adaptation.
- Tight fiscal space constrains development initiatives.
- Policy priorities include addressing fiscal and external imbalances while enhancing the basis for sustained and resilient growth.
Balance sheet and financial sector
- Banks remain well capitalized and liquid.
- Credit unions suffer from persistent weak capital and asset quality.
Structural constraints and growth drivers
- Recovery reflects a rebound in tourism and public investment, supported by buoyant CBI revenues.
- Longstanding impediments to private investment and employment weigh on growth and productivity.
- Strengthening the investment climate and employment prospects is essential to support more durable growth.
Policy recommendations and priorities
- Rebuild essential fiscal buffers accumulated before and during the recovery.
- Reorient fiscal and macroeconomic policies to promote sustained, resilient growth.
- Address external imbalances to reduce vulnerability to external shocks.
- Strengthen financial sector resilience, with particular attention to credit unions’ capital and asset quality.
- Improve conditions for private investment and employment to raise productivity.
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