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Western Hemisphere > Dominica

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Cover IMF Staff Country Reports
Dominica: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Dominica
International Monetary Fund. Western Hemisphere Dept.
The 2024 Article IV Consultation discusses that the Dominican economy has recovered strongly following the pandemic shock. Real gross domestic product grew by 5.6 percent in 2022 and an estimated 4.7 percent in 2023 returning to pre-pandemic output levels. Policy responses have eroded essential fiscal buffers, despite large Citizenship by Investment (CBI) revenues, which have supported reconstruction, infrastructure development, and climate adaptation. The country remains exposed to shocks, while tight fiscal space constrains development initiatives. The ongoing economic expansion provides an opportunity to rebuild essential buffers and reorient policies toward increasing prospects for more sustained and resilient growth. Dominica’s output has recovered to its pre-pandemic level, reflecting a rebound in tourism and public investment, supported by buoyant CBI revenues. Inflation has subsided from its 2022 peak, but external imbalances have deteriorated modestly. Banks remain well capitalized and liquid although credit unions suffer from persistent weak capital and asset quality. The outlook is subject to downside risks, especially from climate change, volatile tourism receipts, commodity prices, and CBI revenues. Meanwhile, longstanding impediments to private investment and employment weigh on growth and productivity. Policy priorities are to address fiscal and external imbalances while enhancing the basis for sustained and resilient growth.
Keywords:
CBI revenue; CBI program framework; financing strategy; core price inflation; macroeconomic policy; Fiscal stance; Credit; Caribbean; Global
Cover IMF Staff Country Reports
Dominica: Technical Assistance Report-External Sector Statistics
International Monetary Fund. Statistics Dept.
This Technical Assistance report on Dominica focuses on external sector statistics. The Eastern Caribbean Central Bank (ECCB) and the Central Statistics Office have implemented recommendations from the previous mission regarding timeliness and data accessibility. The mission focused on improving data sources for travel credits and the Citizenship by Investment Program (CBI) flows for the balance of payments. Revised 2022 balance of payments estimates were reviewed; additional refinement is needed. The ECCB has been incorporating available cash-based data on CBI flows from the fiscal sector into the balance of payments. However, fiscal data for 2021 and 2022 show some possible misclassifications that would affect the correct recording of external flows in the balance of payments. The report highlights that follow-up on the request made to the CBI to complete the ECCB balance of payments questionnaires for 2021 and 2022 and report on the existence of foreign escrow accounts. Coordination between data-producing agencies needs to be improved. A survey of cruise passengers is required to improve the estimates of visitor expenditure; visitors that arrive by yatchs are not surveyed either.
Keywords:
Dominica; balance of payments statistics.; balance of payments statement; balance of payments estimate; business visitor; VES result; visitor expenditure questionnaire; ECCB website; Civil society organizations; External sector statistics; International investment position; Credit; Caribbean
Cover IMF Staff Country Reports
Dominica: 2023 Article IV Consultation-Press Release; and Staff Report for Dominica
International Monetary Fund. Western Hemisphere Dept.
The 2023 Article IV Consultation highlights that the Dominican economy is recovering strongly following the pandemic. Fiscal space remains tight. High Citizenship-by-Investment (CBI) revenue, nearing a record 30 percent of gross domestic product in recent years, has supported public investment and crisis response measures. The economic outlook is positive, predicated on a continued expansion in tourism and implementation of the country’s economic modernization and resilience building agenda The transition to local geothermal energy production and construction of a new airport, planned for the coming years, will sustain economic activity, reduce dependency on fossil fuels, bolster resilience to external shocks, and improve international connectivity. Meanwhile, public debt is set to decline gradually in coming years, supported by efforts to reduce current spending and strengthen tax collection. Building policy buffers and critical infrastructure will help address downside risks stemming from global economic uncertainty, climate change, and volatility of CBI revenue.
Keywords:
CBI revenue; investment goods; CBI program; debt ratio; fuel price policy; Fiscal stance; Credit; Caribbean; Global
Cover Policy Papers
2018 Review of Facilities for Low-Income Countries
International Monetary Fund. Strategy, Policy, &amp
,
Review Department
, and
International Monetary Fund. Finance Dept.
The Fund is facing strong demand for financing from low-income countries (LICs). Commodity price shocks and loose fiscal policies have contributed to rising debt levels and financing needs in many countries. Several developing states, especially smaller ones, are also increasingly vulnerable to large natural disasters. At the same time, many LICs less dependent on commodity exports have enjoyed robust growth in recent years, with more contained vulnerabilities.
Keywords:
PP; financing; Fund; lending; LIC facilities; financing needs; ECF arrangement; needs of LIC; Lic facilities toolkit; access limit; Natural disasters; Balance of payments need; Debt relief; Poverty reduction strategy; Credit; Global
Cover IMF Working Papers
Bank Network Analysis in the ECCU
Mr. Balazs Csonto
,
Mr. Alejandro D Guerson
,
Ms. Alla Myrvoda
, and
Emefa Sewordor
This paper applies network analysis to assess the extent of systemic vulnerabilities in the ECCU banking system. It includes two sets of illustrative stress tests. First, solvency and liquidity shocks to each individual bank and the impact on other banks in the network through their biltareal net asset exposures. Second, country and region-wide tail shocks to GDP affecting capital and liquidity of all banks in the shocked jurisdictions, followed by the rippling effects through the regional network. The results identify systemic institutions that merit hightened attention by the regulator, as determined by the degree of connectivity with the rest of the system, and the extent to which they are vulnerable to the failure of other banks.
Keywords:
WP; bank; ECCU; capital; asset; incorporated bank; F34; G21; ECCU bank; bank capital; defaulted claim; liquidity holding; portfolios diversification opportunity; bank exposure; bank institution; creditor bank; remains high; bank assets; bank network analysis; Commercial banks; Nonperforming loans; Distressed institutions; Credit; Market risk; Global
Cover IMF Staff Country Reports
Eastern Caribbean Currency Union: 2017 Discussion on Common Policies of Member Countries-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
This paper discusses key points of 2017 Discussions on Common Policies of Member Countries of the Eastern Caribbean Currency Union (ECCU). Favorable external conditions continue to support economic recovery in the ECCU, but flat tourism receipts and falling revenues from citizenship programs have weakened growth. The fiscal position has deteriorated slightly, and public debt remains high. Despite progress on financial sector reform, bank lending continues to decline while indigenous banks’ profitability is adversely impacted by increasing costs to secure correspondent banking relationships. The short-term outlook is favorable and risks are broadly balanced, but strong structural policies are needed to address impediments to medium-term growth.
Keywords:
ISCR; CR; ECCU country; cost; legislation; director; country authorities; growth prospect; reducing cost; financing arrangement; tourism inflow; Natural disasters; Fiscal rules; Credit bureaus; Credit; Caribbean; Global
Cover IMF Working Papers
Non-Performing Loans in the ECCU: Determinants and Macroeconomic Impact
Ms. Kimberly Beaton
,
Ms. Alla Myrvoda
, and
Shernnel Thompson
This paper assesses the determinants of NPLs in the Eastern Caribbean Currency Union (ECCU) and whether a deterioration in asset quality may result in negative feedback effects from the banking system to economic activity. The results suggest that the deterioration in asset quality can be attributed to both macroeconomic and bank-specific factors. Banks with stronger profitability and lower exposure to the construction sector and household loans tend to have lower NPLs. Further, some evidence indicates that foreign owned banks systematically have lower NPLs than domestic banks, pointing to the presence of important differences across bank practices with an impact on asset quality. Finally, the results emphasize the strength of macrofinancial feedback loops in the ECCU.
Keywords:
WP; asset quality; NPL ratio; real GDP; dummy variable; Macrofinancial linkages; non-performing loans; credit growth; feedback effects; force bank; return on assets; ownership structure; economic activity; coverage data sets; bank asset quality; resolution process; Nonperforming loans; Foreign banks; Credit; Loans; Commercial banks; Global; Caribbean
Cover IMF Staff Country Reports
St. Lucia: 2015 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
A moderate economic recovery is taking hold in St. Lucia. Favorable international conditions have contributed to improved demand for tourism, St. Lucia’s main economic sector, and the external current account deficit has narrowed significantly. The authorities have made some progress in addressing a weak fiscal position. However, the financial sector continues to be impaired by nonperforming loans, public debt keeps rising, and unemployment remains very high, while external sector competitiveness continues to be weakened by an overvalued exchange rate, economies of scale disadvantages, and structural bottlenecks.
Keywords:
ISCR; CR; tourism inflow; balance of payments; private sector; fiscal year; economic activity; debt target; reform agenda; youth unemployment; excess reserves; growth prospect; Capital spending; Fiscal stance; Natural disasters; Caribbean; Global
Cover IMF Staff Country Reports
Dominica: Request for Disbursement Under the Rapid Credit Facility-Press Release; Staff Report; for Dominica
International Monetary Fund. Western Hemisphere Dept.
This paper discusses Dominica’s Request for Disbursement Under the Rapid Credit Facility (RCF). Tropical Storm Erika had a devastating effect on Dominica’s economy. Total damage and loss is estimated at 96 percent of GDP. Real GDP is projected to decline by 3 percent in 2015, and reconstruction expenditures and the impact on agriculture and tourism activities are putting pressure on the fiscal and external accounts. Despite the high capital expenditures, the 2015 budget deficit will be contained to 2.4 percent of GDP reflecting strong grants, and the current account balance could deteriorate to a deficit of about 15 percent of GDP. The IMF staff supports the authorities’ request for a disbursement under the RCF.
Keywords:
ISCR; CR; balance of payments position; fiscal policy framework; RCF financing; balance of payments difficulty; market price; IMF staff estimate; Capital spending; Credit; Public sector; Caribbean; Global
Cover IMF Staff Country Reports
St. Kitts and Nevis: 2015 Article IV Consultation-First Post-Program Monitoring Program Monitoring Discussions-Press Release; and Staff Report
International Monetary Fund. Western Hemisphere Dept.
This 2015 Article IV Consultation highlights that the economic situation of St. Kitts and Nevis has continued to improve since the completion of the IMF-supported home-grown economic program in July 2014. Continued rapid inflows under the Citizenship-By Investment program have led to a surge in construction activity, and supported a large increase in government and Sugar Industry Diversification Fund investments and spending, including on the People Employment Program. These factors, together with the ongoing recovery in tourist arrivals fueled rapid GDP growth of about 6 percent in 2013 and 2014. The near-term outlook remains strong, but there are risks on the horizon.
Keywords:
ISCR; CR; CBI inflow; one-off corporate tax settlement; reform; inflow; CBI program; income tax tax collection; national assembly; Public sector; Credit; Caribbean; Global