IMF predicts 5% yearly growth for Dominica in 2022-2026

International Monetary Fund (IMF) projected average growth of five percent per year for Dominica from 2022-26. It stated that the island country is making a promising recovery from the fall down caused by the COVID-19 pandemic. In a report released on 03 December 2021, the IMF also stated that Dominica is building resilient infrastructures by using the Citizenship by Investment Programme (CBI) revenues. It added that GDP is expected to recover to pre-pandemic levels by 2023, with annual growth averaging 5% from 2022 to 2026—tourism recovery would be aided by ongoing hotel building and the start of direct flights from the United States in December 2021. The IMF said that the Fiscal Responsibility Bill's passage would help reduce public debt and ensure the government's development plan and its long-term viability. Prime Minister of Dominica Dr Roosevelt Skerrit said that the growth projected by IMF is massive for the island country, "This is a promising growth outlook for our island, despite the impact of the COVID-19 on economic activity,"

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The report added that near-term measures should focus cost-cutting on the fiscal front while avoiding new taxes and fees that stifle the private sector's recovery and the business climate. With public debt surpassing 106 percent of GDP following the pandemic, the passage of the Fiscal Responsibility Bill will help in debt reduction and the government's growth plan's long-term viability. The report suggested that the authorities should also examine allocating a share of CBI money to create a natural catastrophe insurance framework and debt reduction. Priority should be given to credit union capitalization and the reduction of non-performing loans in the banking sector (NPLs). IMF noted that on the fiscal front, near-term measures should focus cost-cutting while avoiding new taxes and fees that stymie the private sector's recovery and the business climate. "With public debt surpassing 106 percent of GDP in the aftermath of the pandemic, the passage of the Fiscal Responsibility Bill will help to reduce public debt and ensure the government's development plan's long-term viability," said the IMF. The report added that authorities should also rethink allocating a portion of CBI money to create a natural catastrophe insurance system and debt reduction. Prioritizing credit union capitalization and reducing non-performing loans should be top priorities in the financial sector (NPLs).

"The massive public investment programme and the predicted gradual rebound in tourism with expanded hotel capacity underpin the growth projection,"

IMF emphasized that the government of Dominica is using the CBI revenue funds "in a managed way" and building the new international airport, disaster-resistant housing, improved roads, a resilient water and sewage network, increased hospital capacity and a geothermal power plant. "These projects will boost growth in the short term while they are being built, as well as raise potential output in the long run, with tourism spillovers and a reduction in fossil fuel dependency, all of which will improve Dominica's external sustainability and competitiveness," noted IMF report.

IMF predicts 5% yearly growth for Dominica in 2022-2026

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