Summary of Mission Outcomes and Priority Recommendations

1. In response to a request from the Central Statistics Office (CSO) in the Ministry of Finance in Dominica, a technical assistance (TA) mission took place between August 29 and September 8, 2023, to support the office improve estimates of Gross Domestic Product (GDP). The mission followed a previous mission undertaken by IMF Statistics Department in October 2022 which assessed the institution and other factors impacting the compilation of Dominica’s GDP and price statistics and identified broader issues that impair the quality of the national accounts compilation program, including the timeliness and reliability of its outputs. In addition, a CARTAC mission in April 2023 initiated work to develop referenced estimates of GDP.

2. The mission therefore focused on three main aspects: supporting improvements of the GDP series in line with the 2008 SNA standards, including re-referencing the volume estimates of GDP to 2018 prices (updated from the existing 2006 base year); identifying data holdings which can be used to improve the quality of the estimates of GDP; and developing of a work program for improving economic statistics.

3. Historically, a key data source used in the compilation of GDP is the annual National Accounts Survey (NAS). This is a sample survey of around 500 businesses. In recent years the response rates to the survey have been less than 10 percent. The previous CARTAC mission in April 2023 concluded that, in its current form, the survey results do not provide a robust basis for estimating either the level or the changes in GDP. Alternative sources of information were therefore developed, including data from the Inland Revenue Department (IRD) on the turnover and cost of business and data from the Department of Social Security (DSS) on the compensation of employees and employee numbers.

4. The methodology and data sources for the 46 main economic activities used in the GDP compilation were reviewed. Improvements were identified and potential additional data sources discussed with the team. Improvements to the methods used to estimate output for agriculture, manufacturing, financial services, and real estate were introduced.

5. Series for GDP in current and constant 2018, prices were developed based on the International Standard Industrial Classification (ISIC) revision 4 from the current ISIC revision 3.1. Analysis of revisions was undertaken, and a time series from 2000–2019 were produced.

6. To reduce considerable redundancy in the existing GDP compilation system, a new compilation procedure was completed comprising a single ‘master’ workbook and twenty-one supporting workbooks. This replaces the numerous workbooks in the existing system, which include significant duplication of the data needed for compilation. The simplification of the process should enable the GDP team to compile the estimates more quickly based on consistent data for the key sources.

7. In terms of identification of potential other data sources which can be used to improve the quality of the estimates of GDP, meetings took place with key government departments including the IRD, Discover Dominica Authority, Dominica Social Security, Customs and Excise, the Ministry of Agriculture, and the Dominica Export and Import agency. Access to key data holdings was discussed, and agreements reached in principle. Essential data needed to improve the estimation of GDP will be made available to the CSO.

8. The mission was undertaken in ‘workshop’ mode with the national accounts team involved directly in all discussions and developments.

9. The CSO has around 12 professional staff including three dedicated to the National Accounts (includes one new starter in November 2022). While some training was provided during the mission on the methods and concepts used to compile the GDP estimates, more is needed to realize the full potential of the team.

10. To support progress in the above work areas, the mission proposed the following priority recommendations needed to improve estimates of GDP.

^{Table 1.}

Priority Recommendations

^{Table 1.}

Priority Recommendations

Target Date	Priority Recommendation	Responsible Institutions
October 2023	Update the data in the GDP system to produce estimates for all years from 2010 to 2021, and publish the referenced series together with a note describing the revisions resulting from the rebasing.	CSO
September 2023	Acquire unit level annual data, including company names, from the Inland Revenue Department’s Corporate Income Tax, Personal Income Tax (for self-employed persons), and Value Added Tax.	CSO
October 2023	Code the IRD dataset to ISIC Revision 4 and link the records to the equivalent businesses in the DSS dataset to establish a business register.	CSO

View Table

^{Table 1.}

Priority Recommendations

Target Date	Priority Recommendation	Responsible Institutions
October 2023	Update the data in the GDP system to produce estimates for all years from 2010 to 2021, and publish the referenced series together with a note describing the revisions resulting from the rebasing.	CSO
September 2023	Acquire unit level annual data, including company names, from the Inland Revenue Department’s Corporate Income Tax, Personal Income Tax (for self-employed persons), and Value Added Tax.	CSO
October 2023	Code the IRD dataset to ISIC Revision 4 and link the records to the equivalent businesses in the DSS dataset to establish a business register.	CSO

11. Further details on the priority recommendations and the related actions/milestones can be found in the action plan under Detailed Technical Assessment and Recommendations.

Section I. Introduction

12. With support for the Eastern Caribbean Central bank (ECCB) the CSO compiles and releases current and constant 2006 price annual estimates of GDP by economic activities based on the International Standard Industrial Classification (ISIC) Revision 3.1. The estimates are broadly consistent with the standards set out in the 1993 System of National Accounts (1993 SNA).

13. The objectives of the mission were to (i) supporting improvements of the GDP series in line with the 2008 SNA standards, including re-referencing the volume estimates of GDP to 2018 prices (updated from the existing 2006 base year); ii) identifying data holdings which can be used to improve the quality of the estimates of GDP; and iii) developing of a work program for improving economic statistics. These developments are considered in the following sections of this report.

Section II. Improving the Estimates of GDP

14. The sources used to compile the estimates of GDP include data from the Ministry of Agriculture, Ministry of Finance, financial statements of major companies, data from government agencies and regulatory authorities, data on insurance and finance from the ECCB, and an annual sample survey of companies, the National Accounts Survey (NAS). As noted in the report for the precious CARATC mission in April 2023, because of response rate of around 10 percent, estimates of value added derived from the NAS survey have required significant imputation, based largely on carrying forward the previously reported values.

15. Therefore, consistent with the recommendation of the previous mission, the current mission replaced the NAS by incorporating alternative sources into the estimation of GDP. In particular, data from the Inland Revenue Department (IRD) on the turnover reported to the value Added Tax (VAT) system and data from the Department of Social Security (DSS) on the contributions to the social security funds and numbers of employees were introduced. The mission finalized the development of systematic bases for processing and updating these datasets and for producing time series by economic activity. Appendix I provides details.

16. A number of improvements were introduced into the estimation methodology during the mission, including:

• ▪ The development of a simple work in progress model for the livestock production activity, covering cattle, sheep, goats, and pigs. This replaces the current estimates which are based on total stock of each animal type each year, multiplied by the price of the animals. This will have tended to misrepresent the total value of production, since it assumed that all animals are slaughtered each year.

• ▪ More detailed data for the quantities of fish caught was introduced to replace the current method which simply aggregated the tonnage of fish of various types.

• ▪ Estimates of output of manufacturing, renting of machinery and equipment, and a number of business and personal services were updated using data for the VAT system on the total sales of manufacturers.

• ▪ The estimates of Financial Services Indirectly Measured (FISIM) were brought in line with the 2008 SNA methodology, including a simple allocation of FISIM consumed as intermediate consumption of the business sector.

• ▪ The estimates of the volume of output of Private Households with Employed Persons were updated to use the data on the number of employees for the social security dataset.

• ▪ The method used to estimate taxes on products and subsidies on products in constant prices was updated to use the volume of total gross value added (GVA) for all economic activities as an indicator of the change. The previous method had deflated the current price values based on an aggregate deflator for GVA.

17. The mission finalized the basis for producing volume estimates of GDP referenced to 2018 prices. The compilation process was integrated into a single ‘master’ workbook, linked to a small number of ‘data’ workbooks. The procedure was considerably streamlined compared with the existing system, with significant simplification of the procedures used, and greater consistency in the naming conventions and codes used introduced. The revised estimates use the International Standard Industrial Classification (ISIC) revision 4, updated from revision 3.1. The estimates were updated for all years from 2010–2019. Detailed business process documentation was developed for the GDP system (see Appendix II).

18. A basis for quality assuring the estimates in both current and constant prices was introduced, based on the contributions to the annual percentage change in the total GDP from each economic activity. This should be used in future as part of the standard checks undertaken by the national accounts team.

19. Analysis of revisions compared with the previously published series was undertake for the years 2010–2019. Of note:

In current prices:

• ▪ The level of GDP in current prices was estimated as 18 percent higher than the previously published level. This revision was largely the result of the use of data for the turnover of business based on the VAT system, replacing the estimates based on the NAS.

• ▪ Chart 1 compares the previously published growth rates of total GDP in current prices with updated estimates.

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Previously Published & Updated Annual Percentage Changes in Total GDP in Current Prices

Citation: Technical Assistance Reports 2024, 050; 10.5089/9798400277580.019.A001

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In constant prices:

• ▪ The weights used to aggregate the volume series for GDP were updated from those based on the published current price 2006 levels of value added to those based on the updated estimates for 2018. Chart 2 shows the changes in these shares.

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Comparison of Weights Used to Aggregate the Volume Estimates of Value Added: Previously Published Current Price Shares of Total GDP for 2006 and Updated Shares for 2018

Citation: Technical Assistance Reports 2024, 050; 10.5089/9798400277580.019.A001

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Of note, the chart shows,

• ▪ The share of education services declined from 12 percent in 2006 to just 4 percent 2018 mainly because of the closure of a major university at the end of 2017.

• ▪ Business services increased from a 1 percent share in 2006 to 11 percent in 2018, in part because of the of the introduction into the estimation of the data for business turnover from the VAT system (replacing the estimates based on the NAS survey).

• ▪ The share of Construction services increased from 4 percent in 2006 to 11 percent in 2018, largely because of the repair and construction work needed in the aftermath of hurricane Maria in September 2017.

• ▪ An increase of the share of manufacturing activity in total GDP as the result of improved data sources now being used (based on data form the VAT system

• ▪ Chart 3 compares the previously published growth rates of total GDP in constant 2006 prices with updated estimates based on 2018 prices.

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Previously Published & Updated Annual Percentage Changes in Total GDP in Constant Prices

Citation: Technical Assistance Reports 2024, 050; 10.5089/9798400277580.019.A001

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Of note, the chart shows,

• ▪ The annual percentage change in GDP in 2013 was revised from -1.0 percent based on the 2006 base year to 4.0 percent based on the updated 2018 based series, a revision of +5.1 percentage points. Of this total revision, 1.8 percentage points resulted from the introduction of the use of VAT turnover to estimate the Business services activity. A further 1.5 percentage points resulted for the introduction of the change in methodology for estimation of the volume of taxes on products (see paragraph 16).

• ▪ The annual percentage change in GDP in 2018 was revised from 3.5 percent based on the 2006 base year to -3.7 percent based on the updated 2018 based series, a revision of -7.2 percentage points. The revision was almost entirely the result of the improved method for measuring the volume of taxes (see paragraph 16), which accounted for -6.6 percentage points of the total.

• ▪ The annual percentage change in GDP in 2019 was revised from 5.5 percent based on the 2006 base year to 9.7 percent based on the updated 2018 based series, a revision of +4.2 percentage points. Again, much of this revision resulted of the improved method for measuring the volume of taxes (see paragraph 16), which accounted for 2.8 percentage points of the total revision, with revision to manufacturing and business services (resulting for the introduction of the VAT turnover data) accounting collectively for a further 2.5 percentage points. Agricultural output accounted for an additional 1.3 percentage points, resulting from the introduction of the improved estimates of output of the Livestock activity, based on the new work in progress model.

20. Long run time series, from 2000 to 2019 were developed in both current and constant prices. In current prices, the method is straightforward and involves ‘backcasting’ the levels of GVA for each ‘elementary’ economic activity using the previously published growth rates and adding the components together to produce the aggregate series.

21. In constant price the method is similar except that all levels (including aggregate GDP) are backcast based on previously published growth rates. This is the method referred to as ‘chainlinking,’ and preserves the previous base years before the latest ‘link’ year (in this case 2012). The method is used to ensure the constant price series adequately reflects the structure of the economy in each year. To achieve this, it was necessary to chainlink the 2006-based constant series with the 2018-based constant price series. This linking is needed so that, for example, the weights used to aggregate the detailed series for economic activities in 2006 are based on estimates of the structure of the economy in that year. Chainlinking in this way requires a ‘link year’ to be chosen, which is usually the year half-way between the previous and latest base years. The year 2012 was chosen because it is approximately in the middle of the period between the two base years, 2006 and 2018. In this case, 2012 was selected as the link year. The basic concept here is to use the 2006 shares of current price GVA as the ‘weights’ for aggregating the constant price series for years between 2000–2012, while the 2018 shares are used for the later years. In short, chainlinked series have potentially many ‘base years,’ but only one ‘reference year’ (in this case, 2018).

22. One feature of chainlinking is that the property of ‘additivity’ is lost in the years before the link, that is that the sum of constant prices GVA across all economic activities is not equal to the total constant price series for years before 2012. This lack of additivity arises because the constant price series are indexes of the change in the volume of economic activity and, as such, do not have an intrinsic ‘level’ (other than that they are referenced to the value of current price GVA in the relevant base year). In contrast, current price series are always additive in this sense.

Recommendations

The CSO should:

• ▪ Update the data in the GDP system to produce estimates for all years from 2010 to 2021.

• ▪ Publish the referenced series together with a note describing the revisions resulting from rebasing to 2018 prices and the incorporation of more comprehensive data.

Section III. Improving the Data Content of GDP and a Workplan for the Further Development of National Accounts and Price Statistics

23. The mission reviewed the data sources that are available for use and/or are used for national accounts compilation purposes and identified areas for improvement. There is scope to improve the annual GDP estimates by economic activity (GDP-P) and to improve on the timeliness of these estimates. The proposed data strategy is to make greater use of administrative data and to conduct periodic studies/investigations to address current data gaps in livestock, transportation, and agriculture. These efforts would provide the necessary information to update benchmark estimates of economic activity through a supply and use framework which will also provide for a comprehensive rebased GDP-P estimate.

24. An important source of data for compiling national accounts is administrative tax and regulatory data. A range of administrative and regulatory data are being produced by various government agencies and departments in Dominica that are being used or could potentially be used by the CSO. Data currently used include trade data, cargo, and shipping data from the Customs Department; financial and insurance sector data from the ECCB; employment and contributions data from the DSS; Government accounts data from the Ministry of Finance. In addition, some data from the Inland Revenue Department (for some individual companies), as well as data for tourism data from DDA, and for fishing from the Fisheries Department,

Tourism

33. Discovery Dominica is responsible for the collection of tourism data. Information for arrivals for tourist is collected from all ports of entry in Dominica. The agency collects arrival information and various attributes associated with the traveler including place of stay and type of accommodations in Dominica (although limited data are available for tourists arriving by yacht). The mission requested unit level information for each of the commercial accommodation types, maximum occupancy rate, length of stay and average price to improve the current output estimates (Table 2 sets out a template for these data).

^{Table 2.}

Template for Table for Data on Stay Over Visitors by Place of Stay

^{Table 2.}

Template for Table for Data on Stay Over Visitors by Place of Stay

ACCOMMODATION TYPE	Year	Maximum Occupancy Rate	Length of Stay Average Price
	2022 2021 2020
Apartment/Cottages
Bed & Breakfast
Campgrounds
Dive/Eco Lodge
Guest House
Hotel
Inns
Medical School Housing
Other
Other Paid
Private Homes
TOTAL

View Table

^{Table 2.}

Template for Table for Data on Stay Over Visitors by Place of Stay

ACCOMMODATION TYPE	Year	Maximum Occupancy Rate	Length of Stay Average Price
	2022 2021 2020
Apartment/Cottages
Bed & Breakfast
Campgrounds
Dive/Eco Lodge
Guest House
Hotel
Inns
Medical School Housing
Other
Other Paid
Private Homes
TOTAL

34. The CSO with support from DDA conduct the Visitor Expenditure Survey (VES). During COVID the survey was suspended. The VES was relaunched in May 2022 and was planned to be conducted on a quarterly basis, however other priorities such as the CENSUS have interrupted the quarterly schedule. For 2023, the VES will only be available for the 4th quarter.

Section IV. Detailed Technical Assessment and Recommendations

^{Table 3.}

Detailed Technical Assessment

^{Table 3.}

Detailed Technical Assessment

Priority	Action/Milestone	Target Completion Date	Actual completion date
Objective: Strengthen compilation and dissemination of macroeconomic and financial statistics for decision making according to internationally accepted statistical standards, including developing statistical infrastructure, source data, serviceability and/or metadata.
Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
Outcome: Data are compiled and disseminated using appropriate statistical techniques, including dealing with data sources, and/or assessment and validation of intermediate data and statistical outputs
H	Assessment of GDP concepts, sources and methods	5/1/2018	Ongoing
Outcome: New benchmarks have been developed aligned to international statistical standards and using the latest most comprehensive source data available
M	Base year for GDP updated to 2018	9/8/2023	Completed
Objective: Outcome: Staff capacity increased through training, especially on developing source data, compilation methods, and dissemination.
Outcome: National accounts compiled and disseminated on a quarterly or monthly basis.
M	Staff trained on national accounts concepts, sources and methods	5/1/2018	Ongoing
H	Train new entrants in the methods used to compile GDP.	4/28/2023	Ongoing

View Table

^{Table 3.}

Detailed Technical Assessment

Priority	Action/Milestone	Target Completion Date	Actual completion date
Objective: Strengthen compilation and dissemination of macroeconomic and financial statistics for decision making according to internationally accepted statistical standards, including developing statistical infrastructure, source data, serviceability and/or metadata.
Outcome: Higher frequency data has been compiled and disseminated internally and/or to the public
Outcome: Data are compiled and disseminated using appropriate statistical techniques, including dealing with data sources, and/or assessment and validation of intermediate data and statistical outputs
H	Assessment of GDP concepts, sources and methods	5/1/2018	Ongoing
Outcome: New benchmarks have been developed aligned to international statistical standards and using the latest most comprehensive source data available
M	Base year for GDP updated to 2018	9/8/2023	Completed
Objective: Outcome: Staff capacity increased through training, especially on developing source data, compilation methods, and dissemination.
Outcome: National accounts compiled and disseminated on a quarterly or monthly basis.
M	Staff trained on national accounts concepts, sources and methods	5/1/2018	Ongoing
H	Train new entrants in the methods used to compile GDP.	4/28/2023	Ongoing

^{Table 3.}

Summary of Recommendations

^{Table 3.}

Summary of Recommendations

Priority	Recommendation	Target Completion Date
H	Update the data in the GDP system to produce estimates for all years from 2010 to 2021.	October 2023
H	Publish the referenced series together with a note describing the revisions resulting from rebasing to 2018 prices and the incorporation of more comprehensive data.	October 2023
H	Acquire unit level annual data, including company names, from the Inland Revenue Department’s Corporate Income Tax, Personal Income Tax (for self-employed persons), and Value Added Tax.	September 2023
H	Code the IRD dataset to ISIC Revision 4 and link the records to the equivalent businesses in the DSS dataset to establish a prototype business register.	October 2023
H	Where relevant, incorporate the CIT/PIT data from these sources into the annual estimation procedure, notably for manufacturing business services.	October 2023
M	Work with the MOA and obtain data on area under crop cultivation and yield rates to improve the output and IC estimates.	November 2023
M	Collaborate with the MOA to obtain key parameter information for the livestock model.	November 2023
M	Request an estimate of the courier packages under 150 EC that can be brought into Dominica free of custom duties.	November 2023
M	Obtain additional information on inbound tourism.	November 2023
M	Establish a regular quarterly visitor expenditure survey.	April 2024
M	Work with DEXIA to understand the agriculture export process.	December 2023

View Table

^{Table 3.}

Summary of Recommendations

Priority	Recommendation	Target Completion Date
H	Update the data in the GDP system to produce estimates for all years from 2010 to 2021.	October 2023
H	Publish the referenced series together with a note describing the revisions resulting from rebasing to 2018 prices and the incorporation of more comprehensive data.	October 2023
H	Acquire unit level annual data, including company names, from the Inland Revenue Department’s Corporate Income Tax, Personal Income Tax (for self-employed persons), and Value Added Tax.	September 2023
H	Code the IRD dataset to ISIC Revision 4 and link the records to the equivalent businesses in the DSS dataset to establish a prototype business register.	October 2023
H	Where relevant, incorporate the CIT/PIT data from these sources into the annual estimation procedure, notably for manufacturing business services.	October 2023
M	Work with the MOA and obtain data on area under crop cultivation and yield rates to improve the output and IC estimates.	November 2023
M	Collaborate with the MOA to obtain key parameter information for the livestock model.	November 2023
M	Request an estimate of the courier packages under 150 EC that can be brought into Dominica free of custom duties.	November 2023
M	Obtain additional information on inbound tourism.	November 2023
M	Establish a regular quarterly visitor expenditure survey.	April 2024
M	Work with DEXIA to understand the agriculture export process.	December 2023

Section V. List of Officials Met During the Mission

Name	Institution
Ms. Denise Edwards, Financial Secretary	Ministry of Finance
Ms. Nella Jules, Statistician	Central Statistics Office
Ms. Marie-Ange Emanuel, Statistician	Central Statistics Office
Mr. Colin Dalrymple, Statistician	Central Statistics Office
Mr Brent Ismael, Statistical officer	Central Statistics Office
Mr. Dwayne Dick, Statistician	Central Statistics Office
Mr. Adisa Trotter, Agriculture Officer	Ministry of Agriculture
Mr. Lennox St. Aimee, Veterinarian	Ministry of Agriculture
Mr. Reginald Severin, Permanent Secretary	Ministry of Agriculture
Ms. Paula Plasko, General Manager of Dexia	Dominica Export Import Agency (Ministry of Foreign Affairs)
Mr. Bristol Lawrence, Manager of DEXIA’s multipurpose packhouse	Dominica Export Import Agency (Ministry of Foreign Affairs)
Mrs. Sylma Scotland Lloyd, Comptroller of Inland Revenue	Inland Revenue Department
Mrs. Annette George-Boney, Asst. Comptroller Inland Revenue Systems Unit	Inland Revenue Department
Mr. Ault Vidal, Assistant Comptroller of Customs	Customs Department
Mrs. Brinda Green-Charles, Database Management Specialist	Customs Department
Ms. Elizabeth Angol, Marketing Executive-Research and Statistics	Discover Dominica Authority
Mrs. Janice Jean Jacques Thomas, Director of Dominica Social Security	Dominica Social Security
Mrs. Johanna John Bertrand, Manager, Actuarial Services & MIS	Dominica Social Security
Mr. Marcus Jean Jacques, Assistant Manager, Actuarial Services & MIS	Dominica Social Security

View Table

Name	Institution
Ms. Denise Edwards, Financial Secretary	Ministry of Finance
Ms. Nella Jules, Statistician	Central Statistics Office
Ms. Marie-Ange Emanuel, Statistician	Central Statistics Office
Mr. Colin Dalrymple, Statistician	Central Statistics Office
Mr Brent Ismael, Statistical officer	Central Statistics Office
Mr. Dwayne Dick, Statistician	Central Statistics Office
Mr. Adisa Trotter, Agriculture Officer	Ministry of Agriculture
Mr. Lennox St. Aimee, Veterinarian	Ministry of Agriculture
Mr. Reginald Severin, Permanent Secretary	Ministry of Agriculture
Ms. Paula Plasko, General Manager of Dexia	Dominica Export Import Agency (Ministry of Foreign Affairs)
Mr. Bristol Lawrence, Manager of DEXIA’s multipurpose packhouse	Dominica Export Import Agency (Ministry of Foreign Affairs)
Mrs. Sylma Scotland Lloyd, Comptroller of Inland Revenue	Inland Revenue Department
Mrs. Annette George-Boney, Asst. Comptroller Inland Revenue Systems Unit	Inland Revenue Department
Mr. Ault Vidal, Assistant Comptroller of Customs	Customs Department
Mrs. Brinda Green-Charles, Database Management Specialist	Customs Department
Ms. Elizabeth Angol, Marketing Executive-Research and Statistics	Discover Dominica Authority
Mrs. Janice Jean Jacques Thomas, Director of Dominica Social Security	Dominica Social Security
Mrs. Johanna John Bertrand, Manager, Actuarial Services & MIS	Dominica Social Security
Mr. Marcus Jean Jacques, Assistant Manager, Actuarial Services & MIS	Dominica Social Security