Roseau, Dominica – May 29, 2008…….. At the end of its 2008 Annual Article IV Consultation in Dominica, an IMF mission has reported that the Dominican economy is recovering well following the passage of Hurricane Dean last year.
Article IV Consultations are conducted on an annual basis on the economic performance of all member countries of the IMF.
The mission reported that the Dominican economy registered Real GDP growth of about 1.5 % in 2007, “despite the effects of the hurricane and is running at 2.5 -3% for this year”.
A Statement by the IMF following their May 19-28, 2008 visit to Dominica stated in part:
“The authorities’ sound economic programme has helped the Dominican economy to weather the effects of the hurricane and a more difficult external environment. The Government’s determination to continue implementing economic policies aimed at reducing the public debt ratio and creating buffers against external shocks and natural disasters is commendable.”
The mission also reported that average prices (as reported by the Consumer Price Index) rose by 5.5 % in 2007 compared to 2006, mainly as a result of higher food and fuel prices and the temporary food price hikes caused by the Hurricane. The external current account deficit widened by 6 % of GDP to 24% in 2007 due again to higher food and fuel import bills, reconstruction related imports and a decline in exports.
The mission welcomed Government’s plans to maintain a primary fiscal surplus target of 3% of GDP to help reduce the still high Debt/GDP ratio.
The Team also encouraged the Government to consider contingency measures to secure this target while carrying out the planned income tax reform, preserving ongoing infrastructure and social projects, and help cushion the effects of higher food and fuel prices on the most vulnerable sections of society.
Looking ahead the mission welcomed the Government’s priorities of boosting medium-term growth and reducing poverty through greater economic diversification, as outlined in the revised Growth and Social Protection Strategy (GSPS).
The mission also supported plans to strengthen the regulatory and supervisory framework for non-bank financial institutions, particularly the passing of the Financial Services Unit (FSU) Act and reducing the cost of doing business, including easing infrastructure complaints and streamlining business procedures. This Strategy, the IMF believes should help enhance productivity and competitiveness, reduce vulnerabilities, and create new sources of growth based on private investment and exports.
During their May 19-28th visit, the IMF mission led by Mr. Wendell Samuel of the Western Hemisphere Department, met with Prime Minister, Hon. Roosevelt Skerrit and other members of his Cabinet.