Saturday, October 14, 2006

ROSEAU, Dominica: The International Monetary Fund expects the Dominican economy to grow by 4 per cent in 2006. This revelation was made at the end of an IMF Staff Mission to Dominica.

An IMF mission, led by Patrick Njoroge, visited Dominica between September 28, 2006 and October 6, 2006 to conduct discussions for the seventh review of the programme supported by the Poverty Reduction and Growth Facility (PRGF) arrangement.

The discussions focused on recent economic performance, fiscal policy and implementation of structural reforms.

In a statement issued on October 6, 2006, in Roseau, the IMF said:

“Macroeconomic performance has strengthened further in 2006. Data confirm that economic activity is expanding strongly and is more broad-based. Domestic demand has remained buoyant; tax revenues and credit continue to grow robustly. Construction has also picked up strongly, pointing to a rebound in private sector confidence. ... On this basis, real GDP growth is expected to rise from 3.5 per cent in 2005 to 4 per cent in 2006.”

If the IMF’s real GDP growth forecast for the Dominican economy in 2006 of 4 per cent materialises, the economy will have registered its third consecutive year of above average growth, well above the historical average of 2 per cent.

The IMF Mission also commended the Government for pushing ahead with its structural reform agenda: “Structural reforms have been advanced. Key reforms include restoring social security sustainability, amending the Electricity Supply Act and the related legislation, implementing the Value Added Tax (VAT), improving public expenditure management, streamlining of the public sector and strengthening the financial sector. “These reforms are expected to play an important role in safeguarding the realized gains and bolstering the prospects for sustainable private sector-led growth and poverty reduction.

The Mission also acknowledged the Government’s commitment to implementing its medium- term strategy for growth and poverty reduction, as articulated in the Growth and Social Protection Strategy (GSPS). The Mission recommends close cooperation with donors to facilitate their timely support for these efforts.

The three-year US $11.4 million Poverty Reduction and Growth Facility (PRGF) arrangement expires on December 31, 2006. In his Budget Address of July 11, 2006, Prime Minister and Minister for Finance, Roosevelt Skerrit, announced that his Government would take the matter of Dominica’s future relationship with the International Monetary Fund to the public through a number of public consultations well before the expiration of the current arrangement.

Completion of the review by the IMF’s Executive Board in the next few months will make available the last disbursement to Dominica under the Programme of about SDR 1.2 million or US $1.7 million.

  Most popular articles: viewed, printed and e-mailed

  Printable version