The International Monetary Fund (IMF) has projected subdued growth in the island’s economy for 2016 in the wake of Tropical Storm Erika, contradicting other more optimistic projections made by other institutions.
In February 2016, the Caribbean Development Bank (CDB) said Dominica will be among the top performers in 2016 with project growth of 3.9 percent. Also in February 2016, statistics from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) showed that percentage wise Dominica will be among top performers in the region with projected growth of 5.2 percent.
But an IMF team, which visited Dominica between March 29 and April 11 and is painting a different picture.
In its report, the IMF team led by Alejandro Guerson, said Dominica was hit hard by Erika and output is estimated to have declined by 3.9 percernt in 2015.
“Output growth is expected to remain subdued in 2016 at 1.3 percent as the economy slowly recovers from the storm and investment in reconstruction picks up,” the report states. “This growth, however, is largely conditional on donor grants proceeding according to expectations. Afterwards, growth is projected to accelerate somewhat as the economy continues to recover towards potential, and to stabilize at 1.7 percent per year over the medium-term. The current account is projected to deteriorate on the back of the increase in reconstruction investment, and then to gradually improve as exports of agriculture, tourism and manufacturing activities recover. The imbalances are expected to be financed primarily with external capital grants and official concessional loans.”
The report stated that reforms are needed to support the recovery process and ensure fiscal sustainability.
“These include further re-prioritization of public investment; wage restraint; a gradual unwinding of storm-related social assistance; and an update of off-shore bank licenses,” the report reads. “The government should also start the specification of the second-generation fiscal measures, which require more time to develop, in amounts consistent with achieving the debt target. Measures under consideration include the rationalization of tax expenditures, a property tax reform, introduction of cost-recovery charges in the provision of health services, and measures to increase the efficiency of public education services. Moreover, complementing these with structural fiscal reforms is important to make fiscal consolidation gains durable. Such measures should focus on strengthening and supporting the budget process and its execution, including systems to improve public financial management, and improving the transparency of the ECP. Also, given the recurrence of natural disasters, the authorities should expedite their plans to build in sufficient fiscal space to be able to respond in case of such future events, and consider the creation of a saving fund, using some of the ECP revenues.”
The report stressed the importance of the private sector in the recovery process.
It reads: “Improving growth prospects will depend on structural reforms to facilitate the contribution of the private sector. The government’s Growth and Social Protection Strategy identifies key areas to increase growth, and reaffirms the role of the private sector as the main driver. The key areas of focus include the diversification of agriculture; investment in public infrastructure; increase of labor productivity; and the reduction in electricity tariffs. To further support private sector investment, the government should adopt measures to enhance the business climate; devise a strategy for diversification into a broader set of areas in addition to agriculture; remove impediments to backward linkages in agriculture and manufacturing; improve access to finance; increase the resilience of public infrastructure to natural disasters; improve and enforce construction and zoning codes; explore alternative sources to reduce the cost of electricity, including through developing the geothermal potential; and seek advice to improve education achievement and modernize labor regulations.”
Simeon and Tony were asking the DLP supporters on the Heng, what kind of economic school Dr. Thompson Fontaine went to, when he predicted that the economy of Dominica was in a terrible state and the organization who had predicted Dominica would see a 3% growth were fooling the Government. Them feller should apologize to Dr. Fontaine. I don’t expect any apologies from neither Tony or Simeon, what we will hear instead is the two year old mapuis about DASS money and land. We will also hear how much money he owes the credit union. We will hear how he was fired by the IMF and cannot find another job. We will never hear he was right about the economy that is in a tail spin and with his expertise he has offered his help to the Government free, as a great patriot.
Hahaha, I remember when the IMF report that koshone… All I say is “I’ll remember that” See them now
soo we needed the IMF to tell us things slow to non moving in the country? they come and ask us questions and interview us then they turn back n tell us the same things we told them in a nicer way. We dont need the IMF or many of the consultants here. we just need to work to improve our standard of living. GDP doesnt fully indicate the standard of life on an island like dominica.
While agriculture aggro processing are important sector of the economy as it relates to food security.if a nation could become wealthy from involvement in agricultural economy,dominica would be the wealthiest country in the caribbean,being engaged in agriculture as its primary economic activity since slavery.most of the other caribbean islands whose economies were based on agriculture have transformed their economies and are far wealthier than Dominica.it was the same imf who adviced the government against purchasing domlec. So an affordable and realiable supply of energy could be delivered as an insentive to national development. No develop country follows imf advice.
All one has to do is look around DA. How much prosperity do you see? How many poor people? How long has all of this been going on? That is your answer. You don’t have to read news articles if you live there to figure it out. The IMF is a money manipulator and countries are its’ pawns.
Thank you DNO for exposing the stupidity of some people… I can see we are still blinded by color… be it RED or BLUE….if only some of us had completed school, we would not be writing such crap… if we take the time to read the article and the comments made by the IMF personnel…we would understand that the projection before the storm was looking good and even after the storm there is still optimism of some growth…yet some of the educated ones will continue to run their mouths because, they know that those of you that sat in the back of the class and never pay attention to simple comprehension will gobble at the negativity…when will we as a people get rid of that mentality ” CRABS IN A BARREL” I don’t live in Dominica but I visit often and in my extensive travels, I have seen poverty…. not only in poor countries but well developed ones….so is time we as Dominicans get down on our knees and pray to god, for our blessings and stop bringing each other down in the gutter.
my friend pack up and move back to Dominica and you well see how far your schooling will take you and it also look like you a one of the DOM-IN-CANS that come only for four days and run back come do business in dominica is it that the gov giving your family free cocking gas? that’s the problem with you people that don’t know about da because you all run away please let people that live and pay there tax talk
Which Storm are You referring to? Hurricane Skeritt?How many years has it been hitting us?How can it look good when contracts to build bridges are going to Barbados Firm?
Remember who was bragging about how well our Election contributed to the Barbados economy?Well this stormy Administration is really pumping money into Barbados instead of keeping it here
So much for comatosed economy and the other ‘Sticky finger’ sound bites. Virtually all of those who have so far commented here appear to be comatosed. In their haste to cline on to any morsel favourable to their jaundiced views, they faillto explain how and why, even in the aftermath of the universally acknowledged “one-hundred years” devastation visited upon the country by tropical storm Erika, on top of one of the worst periods of worldwide economic calamity man has known, Dominica is still projected to experience growth rather than decline. If, as you claim, the economy has been so catastrophically mismanaged by the Labour Party administration over the last 15 years, the IMF report ought to be repleat with negative figures and predictions: it should be painting a bleak future for Dominica but does not.
I thought Ambassador Aaron told us that Erika was a gift to Lennox Linton but it seems to me Skeritt is the one who opened that package and now we can see Him relishing this gift
Not suprise at all, Skerrit can get anything right
Time is now for Dominicans too take to the streets, or we will come like Venezuela with tremendous hardship, mark my words.
Skerite and your gov get out for me please we are saying to you Mr skerite Get the hell out we do not want u to be in charge of our country…. Get out! Get outtttttttttttttt!!!!
This are some of the same things many of us have been talking about. It tells that the current leadership needs to go. Since the days of Piere Charles we were supposed to restructure our economy. The only thing that was done was the crippling VAT which according to a minister was the backbone of the economy. The only thing that can help Dominica now is change in leadership. 14 years has been more than enough time to get the economy on track. I understand there has been global economic challenges and disasters but the economic policies and programs were weak, politically motivated, and counter productive. They were based on never ending charitable contributions. National debt ballooned, unemployment ballooned, cost of living ballooned, salaries and productivity dead. Overnight economic schemes by a minister of finance who knows nothing about cash flow and sustainability. Time for change of the guards. Dominica need pragmatic smart leadership.
Roosevelt Skerritt, take note that your policies are projected to fail with this latest report. Brother, change course for Dominica sake and get out the way. Having the distinction as longest serving leader in a poor country,which gets poorer under your leadership is nothing to puff out your chest about.Despite a bloated cabinet,meaning more advisors,there is less to show for it. The emperor has no clothes he just doesn’t know it and refuses to believe it
I have read the complete report. Full fledged, brutal austerity is a must, should half the host of recommendations be implemented. I feel sorry for ensuing governments, post Labour. Even if they have good intentions, the IMF yoke will choke it off.
The truth will always reveal itself in due time. Even though we didn’t have Erika we still would not have been going anywhere
Well I do not need the to know that DomIMFDominicasonomy is comatosed,mismanaged and dying.Most people contend that we do not have an economy. I AGREE!!! All the talk about helping small private sector businesses is a political farce..,agriculture is dead,manufacturing is dead,,,,An economy where young people are converted into beggars, to keep on voting for an evil regime cannot grow!!! Just look at the square peg in round hole ruling the country..A character obsessed with cakes made in Macau,insultive and incompetent,is streerig the country to hell!!!)WHO CANNOT HEAR WILL FEEL!!
I do not need the IMF to know that Dominicas economy is comatosed…..
That 5.2% and 3.9% growth projected were really not practical. The only way that is possible is if there is a huge injection in capital projects such as the reconstruction process. A typical example has been China who has invested huge sums in building cities that are now ghost cities. One can find almost every major city in the world, Paris for example, in China. Yes it added to GDP but its not sustainable growth. The huge sums expected by this current administration i honestly think did not materialize. And even if it does it still is not sustainable, its just rebuilding what used to exist. I would not like to be in the shoes of this current administration at this moment or else i would have pulled every strand of hair from my head. Let’s hope and pray for the best though.
Wayyyyyyyyyyyyyy Growth, however, is largely conditional on donor grants proceeding according to expectations, wayyyyyyyyy wage restraint; a gradual unwinding of storm-related social assistance; and an update of off-shore bank licenses Kaval Dominique fini bat. DNO u forget the most important piece, here is risk of losing correspondent banking relations, as is currently occurring in other countries in the region. … Wayyyyyyy Skerro kill Dominica. Skerro quaze Dominichien. Tout mon fini bat a Dominique. Where Lennox Honeychurch now in Barbados looking in
The boy just run from the country like most Dominicans, ain’t that something