Prime Minister Skerrit confirms strong economic performance in 2006

Roseau, Dominica – July 20, 2007…… In his presentation of the 2007/2008 Budget on Wednesday, Prime Minister Skerrit stated that economic performance in Dominica in 2006 was strong.

The Prime Minister also stressed that a “sound macroeconomic framework, underpinning all economic activity is the bedrock for national development”.

In 2002, the Government led by Hon. Pierre Charles embarked on a programme of Fiscal Stabilisation and Adjustment in an effort to close the gap between revenue and expenditure, and thereby provide a sounder platform for eliciting financial support necessary to generate economic activity and employment.

Nearly five years later, the country’s economic indicators are pointing in the right direction, with the economy enjoying above-average growth for the last three years.

The economy grew by 4% in 2006, the strongest in nearly two decades, while inflation was below 2%.

The overall growth performance, Hon. Skerrit said, was driven by the growth in tourism and construction. The agriculture sector registered 3.4% growth in 2006, while construction and mining and quarrying grew by 8.5% and 8.5% respectively.

On the issue of the public debt, the Prime Minister said: “Madam Speaker, we have continued this Government’s policy of prudent management of the public debt. We have continued the debt restructuring programme aimed at reducing the debt to sustainable levels by either reducing the stock or reducing the cost of servicing or both.”

As a result of the success of the Debt Restructuring Programme, the ratio of central government debt to GDP stands at 75.5%, which represents a reduction of 10.7 percentage points from 86.2% at the end of June 2006, Hon. Skerrit revealed.

With respect to the public finances, the Prime Minister was able to report a remarkable turnaround in the country’s fiscal position: “The public finances have continued to perform satisfactorily.”

With regard to the value of unpaid cheques, the Prime Minister was able to give some positive news on that front.

“The value of unpaid cheques has been reduced from $31.0 million at the end of June, 2005 to $2.4 million at the end of June, 2007.

The value of unpaid cheques to the Dominica Social Security has been fully paid up and Government contributions have remained current. As at June 30th 2007, all government balances were positive, in stark contrast to the situation that existed a few years ago.

For the 2007/2008 fiscal year, Government is projecting a current account surplus of $27.9 million (excluding debt amortisation), a primary surplus of $29.5 million and an overall surplus of $4.2 million