ROSEAU, Dominica, CMC – The Dominica financial system is estimated to have grown by 3.5 per cent final yr, and the projections are for the expansion to proceed in 2025 at an extra 4.2 per cent by the top of the calendar yr, Finance Minister Dr. Irving McIntyre has mentioned.
He mentioned that the inflation is projected to stabilise at about two per cent and is broadly aligned with United States value traits.
Legislators will start debating the EC$1.3 billion (One EC greenback=US$0.37 cents) funds that McIntyre introduced to Parliament final Friday, wherein he mentioned that the financial system final yr was fueled by strong wholesale and retail commerce, a really formidable public sector funding programme, a rise in tourism exercise, and progress in agricultural output.
He advised legislators that the speed of inflation additionally declined barely, averaging 3.1 per cent final yr, down from 3.5 per cent within the earlier yr, as a result of easing of meals and commodity costs.
The finance minister mentioned that the present account deficit is estimated to have narrowed by two proportion factors to 32.2 per cent of gross home product (GDP) in 2024 however stays above its norm of 16.3 per cent of GDP because of import-heavy infrastructure initiatives.
“At the moment, our debt/GDP ratio hovers round 89 per cent. There was a slight decline within the authorities’s fiscal place in fiscal yr 2024/2025, transferring from a major surplus of 1.5 per cent of GDP within the earlier yr to a deficit of 0.6 per cent. Nonetheless, fiscal yr 2024/25 has had the strongest tax income efficiency on file in addition to the best tax arrears assortment, a transparent signal of the influence of accelerating financial exercise and enhancements in tax administration.”
McIntyre mentioned there was progress in tax income assortment, with all the main tax classes surpassing collections of the earlier yr. He mentioned value-added tax (VAT) has carried out exceptionally effectively, exceeding funds estimates by three per cent and surpassing collections for the final yr by 9 million {dollars}.
“The VAT now accounts for 41 per cent of complete tax revenues. Taxes on incomes and earnings additionally had a powerful efficiency, surpassing funds expectations in addition to final yr’s collections. Non-tax income, supported primarily by CBI inflows, grew by 3.1 per cent over that of the earlier yr.”
McIntyre mentioned that the Citizenship by Funding (CBI) programme continues to be a vital supply of financing, primarily for capital expenditure, and accounts for roughly 58 per cent of complete revenues.
Beneath the CBI programme, overseas traders are granted citizenship of Dominica in return for making a considerable funding within the socio-economic improvement of the nation.
McIntyre mentioned general outlays for recurrent expenditure have elevated barely by 1.3 per cent. Spending on private emoluments, transfers, and subsidies registered will increase while curiosity funds and spending on items and companies declined. He famous that complete recurrent expenditure fell effectively inside the funds estimate for the yr.
“There was a notable enhance in capital expenditure for fiscal yr 2024/2025, equal to 31 per cent of GDP, reflecting the continuing infrastructure improvement push as the federal government continues to speculate closely in financial infrastructure, leading to a capital expenditure of EC$603.5 million.”
The Finance Minister mentioned that progress continues in 2025 with projections at an extra 4.2 per cent by the top of the calendar yr, and that the present account deficit is forecasted to slender to its historic norm of 15 to 16 per cent of GDP by 2027–2028.
“The fiscal operations for funds yr 2025/26 are projected to yield a major surplus of 1 per cent of GDP, as sturdy income progress is anticipated to offset will increase in each recurrent and capital expenditures.
“Additional enlargement in tax income will persist all year long with all main tax classes rising by a median of 4.5 per cent. Enhancements are additionally anticipated in non-tax income as CBI inflows stay elevated.”
He mentioned expenditure progress for this fiscal yr is fueled by a 9.6 per cent enhance in capital expenditure over the precise capital expenditure for the final fiscal yr. Consequently, the capital expenditure is now equal to 32 per cent of GDP.
McIntyre mentioned that recurrent expenditure is anticipated to develop by 7.6 per cent over precise spending for final yr (0.1 per cent of the earlier yr’s estimates), because of allocations for private emoluments.
“The outlook for the 2026/27 and 2027/28 suggests additional enhancements within the fiscal balances as revenues proceed to develop according to projected financial enlargement and complete expenditures stage off.”
However the Finance Minister acknowledged that dangers to the outlook stay lively as ongoing geopolitical tensions might disrupt Dominica’s tourism, commerce, and exterior competitiveness. He mentioned excessive local weather occasions might severely harm infrastructure and compromise progress.
“Moreover, home dangers, reminiscent of fiscal underperformance and lower-than-expected CBI inflows, might jeopardize the completion of key infrastructure initiatives, with knock-on results to progress and debt.
“However, better-than-expected dividends from the development of the worldwide airport and the marina, commissioning of the brand new geothermal vitality plant, or greater progress in superior economies might pose upside dangers to the outlook.
“Moreover, the implementation of the fiscal accountability framework in 2026, the creation of a Debt Reimbursement Fund (DRF), and the institution of the Vulnerability Danger and Resilience Fund (VRF) will assist in sustaining a sound fiscal place.”
McIntyre mentioned as world coverage adjustments proceed and uncertainty reaches unprecedented ranges, there’s a urgent want for well-calibrated methods that stimulate progress, keep fiscal resilience, and foster long-term sustainable improvement.
He mentioned all these environmental elements have been thought-about in crafting this yr’s funds.
