IMF: Dominica projected to grow annually by 5% from 2022 – CARICOM BUSINESS
The IMF is projecting that Dominica will record sustained annual growth of 5% from 2022 thru 2026. Coming at the conclusion of its Article IV consultation, the IMF noted that the growth outlook is promising, supported by the large public investment program and the projected gradual recovery in tourism with added hotel capacity.
However, the Fund also noted that with public debt approaching 106% of GDP after the pandemic, passing the Fiscal Responsibility Bill will support public debt reduction and the sustainability of the government’s development plan. It also recommends that the authorities should consider the allocation of a portion of CBI revenue to build an insurance framework against natural disasters and debt reduction (at least 10% of GDP plus annual savings of about 1.5 % of GDP to ensure its long-term sustainability).
On the financial sector front, the IMF recommends that priority should be given to the capitalization of credit unions and the reduction of non-performing loans (NPLs). NPLs remain high, in the range of 11-14% of loans for banks and 10-17 % for credit unions (the prudential benchmark is 5% in both sectors). (IMF)
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