Dominica among CDB countries projected to achieve GDP growth in 2021

Dominica and the other 18 borrowing member countries of the Caribbean Development Bank (CDB) are projected to see growth in their gross domestic product (GDP) in 2021, according to the CDB.

That growth could be about 3.8% on average and though not set in stone, is a silver lining following a crippling 2020 in which each of these economies contracted by an average of 12.8% due to Covid-19, the CBD reported.

The bank said in a press statement to announce its recently released ‘Regional Report: 2020 Review and 2021 Outlook’ that while it projects this economic improvement, a cloud of uncertainty exists as the Covid-19 pandemic is still ongoing.

Dominica, Saint Lucia, Grenada, the Bahamas and other countries which are relatively dependent on tourism, suffered a hard hit with over 70% drops in overnight visitors in 2020. This spilled over into other sectors of their economies and they each registered double-digit declines in their gross domestic product in 2020, the CDB stated.

“While the bank does not expect a return to 2019 tourism levels this year, tourism-dependent borrowing member countries will experience some economic recovery, led by Anguilla, where GDP is expected to increase by 10.9%,” the CDB said. “This recovery is underpinned by a gradual return of tourists, which is expected in the fourth quarter of the year, and focused efforts to roll out mass vaccination programs throughout the region. However, recovery is subject to risks, such as new waves of infection and possible new variants of the virus, and widespread availability of vaccines for some countries.”

The bank noted that even when the pandemic subsides, existing economic challenges should continue to be tackled in order to maximize growth in the region. The CDB suggested that “accelerated programs to strengthen macro-fiscal frameworks and broad-based structural reforms” are necessary to curtail development constraints which limit productivity and growth.

Pointing to the steep declines in economic activity in 2020, which led to dips in government revenue and spikes in their expenditure to support health and social and economic stimulus, CDB President Dr. Wm Warren Smith underscored the importance of developing stronger economies in the region.

“The pandemic has underscored the importance of building economic and social resilience. We can only reduce the susceptibility to external shocks when we accelerate the diversification of our economies; broaden our productive base; and take appropriate measures to build competitiveness whilst providing adequate safety nets to protect our most vulnerable groups,” Dr. Smith said.

Primary fiscal balance had worsened in every borrowing member state in 2020, averaging -4.1% of GDP compared with -1.3% in 2019, the CDB said. There was increased unemployment in many countries with higher rates among women and young people.

According to the bank, in 2020, debt rose in every CDB borrowing member country except Guyana. The regional debt-to-GDP average moved from 66.5% to 79.5%. In Barbados debt reached almost 150% of GDP. While regional debt is projected to continue rising to 81.5% of GDP in 2021, debt-to-GDP ratios are expected to fall in seven countries, with the steepest decreases in Barbados by 8.3 points to 141.2% and in Jamaica by 6.7% to 97.4%, the CDB said.

The organization is reporting that it spent over $140.2 million in financing in 2020 and secured an additional $50 million for 2021 to support its member countries in mitigating the macroeconomic fallout and adverse social effects of the COVID-19 pandemic.

Last year, Dominica received US$2.5 million or just over EC$6.7 million out of an approved US$66.7 million from the bank as an emergency loan due to Covid-19 economic downturn.

The island was among seven regional territories to benefit from these loans. The others were Belize (US$15 million), Grenada (US$5.9 million), Saint Lucia (US$10.8 million), St. Vincent and the Grenadines (US$11.3 million), and Suriname (US$8.2 million).

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5 Comments

  1. Francisco Etienne-Dods Telemaque
    March 12, 2021

    ” That growth could be about 3.8% on average and though not set in stone ”

    If someone in their right mind anticipates that there can be economic growth in Dominica in 2021, or any other year of 3.8%, and  especially in a time when the worlds economy is devastated by COVID-19 they have to be into voodoo economics.

    In Dominica voodoo is known locally as “obeiah.” In the first place Dominica, is not an industrial country; our main product is “Dominica Passports,” our nations source of revenue comes from the sale of passports!
    So, I wonder how many millions of passports the Roosevelt Skerrit government must sell this year in order to see the nations economy grow 3.8%?

    In good times it is not usual for a nation such as United States economy to grow by 4% in any one year.

    Three (3.8%) point eight percent is actually 4.0% mathematically. Our dependency is on the sale of passports, and the “tourist industry,” which is all but dead!

  2. Ibo France
    March 3, 2021

    Too many Caribbean countries depend on a mono-industry economy, namely, TOURISM.

    They need to diversify their economies most urgently. Agriculture, agro-processing, light manufacturing, more investing in human resources in terms of skills (technology, masonry, carpentry, joinery, plumbing, mechanic, mechanical & civil engineering, etc).

    In Dominica our revenue comes from two main sources – the CBI program and global solicitation (begging).

    It will take astute and visionary leadership to change the downward trajectory of the economy. Roosevelt Skerrit is NOT the right captain to steady the ship of state in these turbulent times..

    Well-loved. Like or Dislike: Thumb up 14 Thumb down 2
    • click here
      March 4, 2021

      The person who disliked this comment either doesnt understand what it takes to our caribbean nations, Dominica particullarly to develop sustainably or simply doesnt like any criticism of himself or his government.

      In the 80’s and 90’s we had all of that. Even though tourism wasnt the primary industry, we processed and exported value added products, farmers were well off and yes even hoteliers were well off too.

      Time will tell. It has to et worse before it will get better. The question is, how much are Dominicans willing to give and take.

      Well-loved. Like or Dislike: Thumb up 4 Thumb down 0
    • March 4, 2021

      Always negative comments on the Administration. Never anything positive to say or do. Whoever you are wishing to be PM of Dominica, will never be. Not on this earth. Be careful what you wish for, Ibo France.

      Hot debate. What do you think? Thumb up 2 Thumb down 6
      • click here
        March 5, 2021

        Doesnt matter who will be next PM, once they can and will do what needs to be done. To actualize our true potential. Instead of holding the people and resources hostage. Minimum wage still 4.50 EC. cost of living way up. Jobs far and few. Some would say go and plant a garden lazy, but gardens need inputs. If you have no money you cannot even buy a cutlass. The administration is doing negative. thats why the comments are that. Since 2015 the hillsborough bridge is down, but within that time, PM’s current house was built, Now he building a new one right next to it. CBI money missing, and i could go on and on, goodwill school students still forced to go to school at the Dominica Grammar School. nonsense that happening in that country.

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