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2018 Annual Economic and Financial Review
DOMINICA
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54
Eastern Caribbean Central Bank
transactions led to a net outflow of $26.1m
compared with one of $18.4m in 2017.
Outlook
Economic activity in Dominica is likely to
strengthen in 2019. Output of goods and
services is projected to increase by
2.0 per cent in 2019, based on expected
positive developments in key sectors.
Risks
to this outlook are tilted to the downside.
Growth in the construction sector is expected
to continue, supported by ongoing
reconstruction and rehabilitation activities in
the public sector. The advancement of private
sector projects such as the construction of the
Citizenship by Investment funded Anichi
Resorts, Jungle Bay Hotel and the Tranquility
Beach Hotel, in addition to the continued
repair and reconstruction of residential homes,
is likely to contribute to the buoyancy in
construction activity. Following the
replanting of produce in 2018, the agricultural
sector is projected to recover in 2019.
Activity in the sector is also expected to be
supported by government-led programmes
such as the rehabilitation of coffee and cocoa
and the expansion of vegetable production. In
addition, the number of visitors is predicted to
increase as the rehabilitation of tourism
infrastructure
continues.
Further,
manufacturing output is expected to be
boosted by the resumption of the production
of soap after a hiatus.
The overall fiscal balance is anticipated to
worsen, mainly because of increased
expenditure on the recovery and
reconstruction effort. This outturn is however
expected to be moderated by the continued
inflow of funds from the Citizenship by
Investment Programme and the expected
steady intake of indirect taxes as a result of
high imports and the recovery of the wholesale
and retail sector. In the external sector, the
relatively high merchandise deficit is likely to
be sustained reflecting the continued import of
construction material. However, exports are
expected to recover to some degree as the
agricultural sector rebounds.
Downside risks to this outlook include a
likely deceleration in revenue from the
Citizenship by Investment Programme; the
receipt of fewer grants than expected
and/or delays in the disbursement of loan or
grant funds, which could slow down the
implementation of the recovery and
reconstruction effort
. In addition, Dominica
remains vulnerable to external shocks such as
adverse weather; weakening growth prospects