Dominica receives favourable credit ratings from CariCRIS

credit ratingRegional credit rating agency Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the ratings of CariBBB- (foreign currency rating) and CariBBB—(local currency rating) on its regional rating scale to the national debt issue of the size of US$25 million of the government Dominica.

In a press release showing its latest credit ratings the agency said, “these ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is adequate.”

CariCRIS said the ratings reflects Dominica’s “prudent fiscal management evidenced by a modest current account balance and comfortable debt servicing ratios, as well as monetary and exchange rate stability.”

“The country’s stable political environment and moderate though declining external sector performance also support the ratings,” according to the agency.

However, the CariCRIS warns that the “rating strengths are tempered by the small, open economy with a narrow economic base, which renders it highly vulnerable to external shocks, and severe capacity constraints.”

CariCRIS is the Caribbean’s regional credit rating agency and its credit rating is an assessment of an entity’s creditworthiness relative to other debt issuing entities.

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37 Comments

  1. Malgraysa
    October 4, 2014

    The rating for Dominica by CariCris is not “favourable” but “adequate” (CariCris’ actual words!). In my school days the teacher would follow that my saying “can do, better”

  2. ROSEAU VALLEY
    October 2, 2014

    First of all, DNO’s headline is incorrect. CariCRIS has given Dominica an “ADEQUATE” rating and not a “FAVOURABLE” rating. Favourability is not a ranking of CariCRIS.

    In general, the news from CariCRIS is okay but nothing to scream about as the DLP would like us to think we should. Having read the attached, we wondered why CariCRIS would be issuing, re-issuing, confirming and re-confirming its news release every year and two to three times a year. Those of us following the political campaign know that the DLP has frequently cited this report as evidence that all is well with the Dominica economy and that Labour is working. Here is the full CariCRIS report.
    http://www.caricris.com/index.php?option=com_pressrelease&view=pressrelease&Itemid=84&id=212&t=p

    What we found out is interesting. According to CariCRIS’ policy, all ratings must be solicited directly from it by an organization, institution or government. The organization’s policy on Unsolicited Ratings states “CariCRISs will not assign unsolicited ratings and all ratings will be assigned only on specific request from the issuer”
    .http://www.caricris.com/index.php?option=com_content&view=category&layout=blog&id=19&Itemid=23

    Therefore, one can conclude that the DLP must be making specific requests /paying CariCRIS to repeatedly and frequently issue this “Good news”.

    Whereas the DLP thinks that this is a “great report” on the status of the economy, actually it is not much of a big deal really. One should note that the rating is “ADEQUATE” on a scale that spreads from HIGHEST, HIGH, GOOD, ADEQUATE, SPECULATIVE, WEAK, VERY WEAK, DEFAULT. Dominica’s rating is not as great as the DLP would have us believe relative to other countries and institutions in the region. It is just average compared to the ratings for Trinidad and the language used to detail the St. Lucian economy relative to Dominica.
    http://www.caricris.com/index.php?option=com_content&view=category&layout=blog&id=13&Itemid=16

    Noting that CariCRIS is paid to make a statement upon request, its report would never be overly negative. One has to go beyond the ratings and compare for instance the rating of St Lucia with Dominica. The devil or angels are not in the headlines but the details, which CarCRIS has “mysteriously” left out with respect to Dominica. The report on St Lucia, which also has an “adequate” rating, tells a story which is not told for Dominica beyond the general rating.

    Although the rating of Dominica and St. Lucia are similar, CariCRIS report on St. Lucia is completely different from that of Dominica. The details with which CariCRIS describes the St Lucian economy cannot be compared with the shallow description of the Dominican economy
    http://www.caricris.com/index.php?option=com_pressrelease&view=pressrelease&Itemid=84&id=201&t=p

    It should also be noted that CariCRIS is basing its analysis on 2011 data, which are not up to date. It states “while government is the largest employer, the main sectors fuelling growth in 2011 were construction (8.4%), mining and quarrying (5%) and agriculture (4%). Many initiatives in these industries are driven by public policy.”

    Furthermore, as Dominica is part of a grouping of Countries and does not have control over its currency, practically every rating in the Caribbean sub grouping will be the same in terms of monetary and exchange rate stability and also the country’s stable political environment .

    The fact is Dominica’s economy is not doing well.
    According to the IMF recent world economic Outlook, Dominica has the 20th worse economy in the world: http://www.businessinsider.com/worlds-slowest-economies-2012-10
    According to ECLAC, Dominica’s economy will be among the slowest to grow in the Caribbean as per its projections for 2014.
    Dominica ranks last in foreign investment in Caribbean. According to the IMF, relative to the other countries in the region, Dominica is last in all economic indicators. The IMF has advised that we should blame the poor economic situation in Dominica for the high rate of writing off of bad debts by commercial banks and Credit Unions.
    Anyway, we will take the “Adequate” rating for now and vote wisely so that we can start working on the fundamentals of the Dominican economy
    Respectfully
    Roseau Valley

    • Jay
      October 3, 2014

      Brilliantly researched and factual. We have to be unemotional about serious issues like these and recognize problems where they exist, even if we dislike owing up to them. Nobody likes bad news but if we are to move forward we have to focus on fixing them rather than ignore them in self congratulatory euphoria.

    • UDOHREADYET
      October 3, 2014

      Roseau Valley… So what you’re saying is if i’m an investor and i want to invest money in DA I should listen to all the bad things you have to say about your own economy and not invest and ignore this article completely?
      Your strategy is working… no wonder no one is investing in DA!
      hating affects everybody… we are all in the same boat hating on your country and government only brings you down. SOT

      • ROSEAU VALLEY
        October 4, 2014

        We appreciate your feedback, albeit we won’t entertain a debate on its contents. We commend you for commenting instead of just giving a thumbs down.
        Please feel free to send Roseau Valley a Freind Request on Facebook, where we have been discussing the economy. We would love to engage you and the others who have given a thumbs down to the comments above.

        My friend, please note that an investor will not make a decision to invest in Dominica based on what Roseau valley writes on DNO. Any serious investor will do his/her research on the fundamentals. This is the reason that investors are more interested in investing in short term instruments like low interest /safe/low risk Treasury Bills as opposed to longer term, higher risk investments in Dominica.
        Looking forwad to your FB freind request.
        Respectfully
        Roseau Valley.

  3. ROSEAU VALLEY
    October 2, 2014

    CariCRIS has warned, “the rating strengths are tempered by the small, open economy with a narrow economic base, which renders it highly vulnerable to external shocks, and severe capacity constraints.”

    Although Dominica, like every small Island developing state is indeed vulnerable to external economic forces, according to the IMF, “owing to the nature/structure of Dominica’s economy, the country was/is not significantly affected by what the DLP frequently refers to as the ongoing Global Crisis.

    The IMF has stated,
    “While less affected by the global crisis than many of its peers, Dominica’s recovery remains fragile. Following a shallow recession in 2009, growth has averaged about 1 percent in 2010–11. ….The weak recovery reflects anemic domestic demand, low tourist arrivals and closure of some manufacturing operations.

    Employment conditions remain strained: the unemployment rate, most recently recorded at 10 percent in 2009 (currently 23 % in 2014), remains high, and about five percent of the labor force were discouraged workers.

    The structure of Dominica’s economy renders it less sensitive to spillovers from the world business cycle. The small scale of the tourism industry and the preponderance of stay-over visitors from Caribbean countries make it less vulnerable to the business cycle fluctuations in key tourism markets, as only a third of stay over visitors are from United States, United Kingdom, or Canada – the smallest share in the ECCU.

    Moreover, a large share of the stay over tourists from the U.S. is accounted for by students at the offshore medical schools, whose decisions to travel to Dominica are less likely to be influenced by economic developments than pleasure tourism. In the agriculture industry, which is much larger than in any other ECCU member both in absolute terms and as a share of GDP, output is mainly influenced by domestic factors such as weather and crop
    conditions.”

    According to the IMF, Dominica’s economy is performing below the global average and far below the other Islands in the Caribbean.
    “Dominica’s economy faces a challenging recovery ahead. Economic activity has reached pre-crisis levels, but short-term indicators and a weakening external environment do not bode well for a strong recovery in the near future. Fiscal policies have provided support to the economy during the post-crisis period, but will now need to address impending liquidity and sustainability constraints. Over the medium term, without a change in the growth strategy, the economy could be facing weak potential growth prospects.” Page 22, IMF report of January 2013
    Respectfully
    Roseau Valley

    • UDOHREADYET
      October 3, 2014

      Being less dependent on tourism is what makes DA’s economy less fragile than other Caribbean countries. the European countries that are in financial crisis Spain, Ireland, Greece, Portugal, Italy etc are the ones who are heavily dependent on tourism for their economy… if you don’t believe me do your research. Dominicans have always been enterprising, entrepreneurial and self sufficient throughout our history… even without major industry people are surviving and some are thriving. with the proper investments, marketing, branding and expansion into foreign markets… instead of bringing them to us we must go to them… just like the diaspora has done by going out there and sending back what they can (materials, ideas, finance etc).

  4. anonymous2
    October 2, 2014

    More propaganda.

  5. awa wi
    October 2, 2014

    where is the link to the report? plus i find the first paragraph confusing to an extent. the debt figure has has not even been presented nor has any relation been made to the gdp. the external sector is under performing to what extent? hmm need to see some actual figures and stats. plus its not really if we have good credit but also what is happening to the money we receive because its like u have good credit but is corn curls u buying plus d change in ur pocket from ur parents(the taxpayers of this country)
    wud really like to see the link admin or the document as we are getting accustomed to these days

    • awa wi
      October 2, 2014

      plus i wonder wat info they using cause look the president in the un using data from 5 years ago lol

  6. October 2, 2014

    Beřrrrrrrrrrŕrrrrrrr

  7. labour is working
    October 2, 2014

    let come to gether to make it work no matter if we blue or red

    • JoJo
      October 3, 2014

      Amen. I’m voting for the Team because only Team work will get us to progress.

  8. lewis
    October 2, 2014

    please dno all why you will not publish imf worldbank growth to gdp reports from 1995 to 2014..if dno claim they not political why asr they afraid to publish dat report,,theres chats ,graphs,,just google imf gdp report dominica

    • Do it yourself
      October 4, 2014

      Why didn’t you just put the link in your comment? You should not have to depend on DNO to get and share the info you want to share….

    • Malgraysa
      October 5, 2014

      DNO can never be accused of being afraid to publish World Bank reports.
      I would ask you to check back as recent as Oct.16, 2013 when DNO published GDP data under the heading:
      “Dominica ranks low on GDP per Capita in the Caribbean”

  9. Referee
    October 2, 2014

    It’s interesting to note this story by DNO is really a rehash of the same story that appeared in March 2012 and repeated in in June 2013, verbatim. Nothing really has changed, except that the economy may have deteriorated since the story first appeared two years ago.
    So I can understand why the DLP would want to dig into the archives to produce a warmed up version of an old story, never mind how relevant it might be for the current economic circumstances.
    The final point worth noting is that it is not enough to have imprimatur of a credit rating agency whose credibility might not be stellar given their relatively short history in the business. It is more important to have the confidence of those who matter…investors. And the judgement of investors may already be rendered, given the relatively low level of direct foreign investments in Dominica which remains the lowest in the OECS.

    • Anonymous
      October 2, 2014

      You are right, this is essentially a rehash of the statements issued in 2013 and 2012 as mentioned and in reality is in relationship to the short term debt, in the form of T-bills raised by the government.
      Dominica is not even rated by the leading world agencies, be they S&P, Moody’s or Fitch, but one can get some sense of the CariCris rating when comparing it with Barbados for example, which is listed by these agencies.
      This local rating agency last gave Barbados a Car-A rating when S&P rated it at BB- and only last June Moody’s downgraded it fromB3 to BA3 status, i.e. junk.
      We should be careful not to lull ourselves into a false sense of wellbeing and blinker our eyes to the world outside. We are in a crisis, particularly the OECS monetary union. In fact last Nov. Moody’s investor service called for a devaluation of our E.C. Dollar in a bid to address “the region’s debt crisis”.
      Personally I pray that the government will not be tempted to use this as a pretext and pull a stunt to compulsory convert local holdings of hard currency into a virtual one (Bitcoins) comes next March in imitation of Equador, which finds itself in a similar predicament and has already decided to start paying its civil servants in its own version of Bitcoin from Dec. of this year.
      Depending on the outcome of the election I would advise anyone to limit their local currency holdings to the absolute minimum.

      • Referee
        October 2, 2014

        Your comment above is an eye opener. Certainly puts matters in a clearer perspective

  10. Flowers
    October 2, 2014

    That’s very good news for the DLP. Presently the entire Caribbean area has felt the effects of the recession, but the economy of Dominica has managed to remain stable. Good news my PM. Puerto & the VI were once the gem and bread basket of the Caribbean now their governments are facing bankruptcy. Mr. Skerrit, no man is perfect, but you are sure trying. Kudos

  11. Cerberus
    October 2, 2014

    CariCRIS is a minnow in the global credit rating business. It would be far more interesting to know what rating, if any Standard & Poor for example would give us. That would be far more meaningful.

    • Anonymous
      October 2, 2014

      Standard & Poor, the same agency that gave gold plated ratings to the credit default swaps and the rest of the garbage debt just prior to the financial meltdown of 2008?

      I don’t have confidence in any of these credit rating agencies.

    • LawieBawie
      October 2, 2014

      OH my gosh!!! Man there is just no satisfaction for you people at all. Even when we ( we means Dominica) wins you people are dissatisfied because it makes the government look too good. Come on man, grow up already!!

    • derp
      October 2, 2014

      lmao you mentioning the S&P that’s like comparing apples to stones, no comparison…

      • Me
        October 3, 2014

        Indeed, CariCris and S&P are two different entities with two different rating criteria but if you must make an analogy I would say that S&P are the apples and CariCris the stones.

  12. Real Dominican
    October 2, 2014

    Very happy to see DNO making an effort in reporting the fact that Dominica’s Fiscal Stability is as a result of the “Prudent” financial management of the Right Hon. Roosevelt Skerrit and the “Real Team” of men and women who has the managerial skills. Isn’t it clear to see that running Dominica, the Land that we all Love Dearly MUST remain under the capable care of The Dominica Labour Party?

    Vote The DLP

  13. Huh????
    October 2, 2014

    We do not believe this report. Thompson has a Phd in economics and he said the economy is at it’s worst and the anecdotal evidence proves it. End of study. Workers!!!!

    • Anonymous
      October 2, 2014

      Very funny

  14. TRUEMAN
    October 2, 2014

    *****THAT IS VERY TRUE*****

    “However, the CariCRIS warns that the “rating strengths are tempered by the small, open economy with a narrow economic base, which renders it highly vulnerable to external shocks, and severe capacity constraints.”

    ………………………………………………..

    We must always be positive and not negative…………… BUT…..

    this above statement by the agency [Caricris] must be taken very seriously. This time it is wise to focus on this negative and find feasible & effective ways to remedy this shortcomings.

    Best wishes for us!!

    -Thanks

    • smh
      October 2, 2014

      What it simply means is that though we are doing ok but there’s room for improvement….as always, with all governments….no matter what there is always room for improvement. so don’t go trying to mislead those who may not fully understand what the line means…give Jack his jacket and Jacqueline her lipstick..our government working

  15. Anonymous555
    October 2, 2014

    Wow i wonder what team dominica think of this article…or are we still in a state of colapse….JUS Wondering

    • October 2, 2014

      you need to read the article and understand it.

    • October 2, 2014

      You do even understand what you read.. the Government Credit rating is NOT the economy.. here is what the same story said about the economy.. which is the bread and butter of the barefoot man..

      “..rating strengths are tempered by the small, open economy with a narrow economic base, which renders it highly vulnerable to external shocks””

      Translation: The darm economy is Weak, Very Weak…

      SMH

      • joe
        October 2, 2014

        Untold Stories how does that translate to the economy weak??

        All the islands are VULNERABLE to EXTERNAL SHOCKS so how is that indicating a WEAK ECONOMY??

        You must be part of TEAM SOT!!!!!!

      • Anonymous555
        October 2, 2014

        “rating strengths are tempered by the small, open economy with a narrow economic base, so i take it to mean that our economy is improving slowly but surely…..Rome wasn’t built in a day it took them years and they are still improvin so give dominica a chance to grow …it’s been watered with the right manure…let not your be troubled…. :lol:

    • Anonymous
      October 2, 2014

      What do you think? They will criticize it and put a spin on it to make it look bad. Just tune in starting Sunday and you will hear.

  16. Derick Gonsalves
    October 2, 2014

    Lets hear the blue vex millibugs spin this on dno

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