IMF forecasts point to 5% economic growth in Dominica in the coming year
Roseau: As COVID-19 infections are on the decline, Dominica could experience 5% economic growth in the coming year, according to forecasts from the International Monetary Fund.
The IMF noted that by 2023, gross domestic product (GDP) is expected to return to the percentage it was before the pandemic appeared on the island, which equates to growth of five percent per year d ‘by 2022-2026.
According to the cited international organization, the tourism sector is the main contributor to this growth, with the United States only opening direct flights to the island this month.
The majority of travelers / tourists to Dominica are primarily from the United States. In addition, construction of hotels is also continuing in the Caribbean country.
The IMF added: “The vulnerability of the financial sector, especially credit unions, where 4 out of 6 institutions have insufficient capital buffers below regulatory requirements, could increase downside risks and could lead to contingent fiscal liabilities â.
The organization, further expressing concern, said the insufficient vaccination rate, reluctance to vaccinate and new emerging variants of COVID-19 could be an obstacle to the island’s economic growth.
âDespite an intense decline in tax revenues and an increase in spending, the large CBI revenues resulted in a slight reduction in the budget balance in fiscal year 2020. However, the expected public debt reached 106% of GDP in 2020. with an increase in official loans â IMF further cited.
While talking about ongoing projects in Dominica such as – a new international airport, natural disaster resilient housing, improved roads, resilient water and sewage system, strengthen the health sector, will boost the growth of the island nation.
“All of these projects would certainly stimulate short-term growth during the construction phase and will also increase long-term potential output, including tourism spillovers and reduced dependence on fossil fuels, all of which improve external sustainability and Dominica’s competitiveness ” the IMF said.