Economy of Dominica

Economy of Dominica

The volume of GDP in 2002 amounted to 254.4 million US dollars, per capita – 3543 dollars. Annual GDP growth in the 1990s. 2.5%, in 2001 there was a drop of 4.2%, in 2002 – by 4.7%. The annual inflation rate in 1990-2000 was 1.8%. Unemployment, according to official data for 1999, is 16%; according to other estimates, it reaches 25%. The share of agriculture in GDP (2001) was 17.2%, industry and energy – 14.7%, construction – 8.2%, services – 59.9%, but 40% of the economically active population is employed in agriculture.

According to businesscarriers, the industry is represented by coconut processing enterprises, the production of soap, detergents, toothpaste and soft drinks.

From Ser. 1930s agriculture specialized in the export production of bananas. Due to increased competition in the EU markets and unfavorable natural conditions, production decreased from a record figure of 58.0 thousand tons in 1992 to 17 thousand tons in 2002. Grapefruits, fig trees, coconuts, flowers are grown for export, for domestic needs – root vegetables, fruits and vegetables. Animal husbandry and fishing are poorly developed. Food needs are met by 60% through local production.

The length of motor roads is 780 km, of which half are paved. The largest ports are Roseau and Portsmouth, which specializes in shipping bananas. Two airports that do not have international status and are not able to receive modern aircraft. Telephone communication is in the hands of the British Cable & Wireless, the provision of devices – 310 pcs. per 1000 inhabitants.

The number of foreign tourists reached 205,000 in 2002, of which 137,000 were cruise tourists. Due to the lack of hotel rooms, St. 1/2 tourists stay in private houses.

Throughout the 1990s. Dominica pursued a rather conservative economic and social policy. The only act of privatization was the sale in 1997 of a 73% stake in the energy company DOMLEC to the British CDC. Plans for tax reform and the introduction of VAT were not implemented. Employment in the public sector was artificially supported. The economic downturn of 2001–02 forced the government to adopt a structural reform program supported by an IMF loan. Public sector payroll expenditures have been cut from 16.2% to 15.1% of GDP, and an additional 4% payroll tax and a 5% sales tax on telecommunications have been introduced. A plan for tax reform has been developed, it is planned to privatize the banana corporation and remove price controls on fuel and cement.

The Central Bank of Dominica is the Eastern Caribbean Central Bank. Since 1976, the monetary unit has had a fixed exchange rate of 2.7:1 to the dollar. There are 1 state and 4 foreign commercial banks and 1 development bank, 18 credit unions and 20 insurance companies in the country. Since 1997, offshore activities began to develop, 7.5 thousand commercial companies, 5 banks, 2 insurance and 5 trust companies were registered (2001).

The share of taxes in GDP is 22-25%, of which St. 1/2 falls on taxes and duties on foreign trade activities. The revenue side of the Dominica government budget has a large share of external grants, peaking at 9.4% of GDP in 2001/02. The budget is reduced to a chronic deficit, which increased from 3.7 to 7.1% of GDP in 1998-2002, respectively, the public debt increased from 60.8 to 110.6% of GDP.

The volume of exports for 1990-2002 decreased from 53 million to 42 million dollars, imports – from 118 million to 116 million dollars. USA. Over the past decade, a radical restructuring of the structure of exports has taken place: the share of agricultural goods for 1992-2001 decreased from 63.8 to 31.6%, incl. bananas – from 56.6 to 18.1%, while industrial products increased from 32.3 to 68.4%. The leading export commodity in recent years (23.5% in 2002) is soap, supplied to neighboring Caribbean countries. Main trading partners (2002,%): in terms of exports – CARI-COM countries (55.8), Great Britain (22.7), USA (9.1); imports – USA (36.6), CARICOM countries (29.6), UK (8.6). External debt reached $192 million in 2002, or 76% of GDP.

GDP per capita at purchasing power parity in 2001 was $5,040. The proportion of people below the poverty line is 39% of the population. The average monthly salary is $134. According to the Human Development Index, Dominica ranks 68th in the world.

Economy of Dominica