The Caribbean island of Dominica is expected to record sustained annual growth of five per cent from 2022 through 2026.

Coming at the conclusion of its Article IV consultation, the International Monetary Fund (IMF)noted that the growth outlook is promising, supported by the large public investment programmeand the projected gradual recovery in tourism with added hotel capacity.

However, the Fund also noted that, with public debt approaching 106 per cent of GDP after the pandemic, passing the Fiscal Responsibility Bill will support public debt reduction and the sustainability of the government’s development plan.

The IMF also recommended that the authorities consider the allocation of a portion of Citizenship-by-Investment (CBI) revenue to build an insurance framework against natural disasters and debt reduction (at least 10 per cent of GDP plus annual savings of about 1.5 per cent of GDP to ensure its long-term sustainability).

On the financial sector front, the IMF recommended that priority should be given to the capitalisation of credit unions and the reduction of non-performing loans (NPLs). NPLs remain high, in the range of 11-14 per cent of loans for banks and 10-17 per cent for credit unions (the prudential benchmark is five per cent in both sectors).