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World > North America > Dominica > Economy (Notes)

Dominica - Economy (Notes)


ECONOMY
Dominica's economy grew by 3.5% in 2005 and 4.0% in 2006, following a decade of poor performance. The country nearly had a financial crisis in 2003 and 2004. Growth in 2006 was attributed to gains in tourism, construction, offshore and other services, and some sub-sectors of the banana industry. The International Monetary Fund (IMF) recently praised the Government of Dominica for its successful macroeconomic reforms. The IMF also pointed out remaining challenges, including further reductions in public debt, increased financial sector regulation, and market diversification.

Bananas and other agriculture dominate Dominica's economy, and nearly one-third of the labor force works in agriculture. This sector, however, is highly vulnerable to weather conditions and to external events affecting commodity prices. In response to decreasing European Union (EU) banana trade preferences, the government has diversified the agricultural sector by introducing coffee, patchouli, aloe vera, cut flowers, and exotic fruits such as mangoes, guavas, and papayas. Dominica has had some success in increasing its manufactured exports, primarily soap.

Dominica is mostly volcanic and has few beaches; therefore, tourism has developed more slowly than on neighboring islands. Nevertheless, Dominica's high, rugged mountains, rainforests, freshwater lakes, hot springs, waterfalls, and diving spots make it an attractive eco-tourism destination. Cruise ship stopovers have increased following the development of modern docking and waterfront facilities in the capital.

Dominica's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

Dominica is a beneficiary of the U.S. Caribbean Basin Initiative that grants duty-free entry into the United States for many goods. Dominica also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM), the CARICOM Single Market and Economy (CSME), and the Organization of Eastern Caribbean States (OECS).


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Climate - Current Time - Ranking Positions - East Caribbean Dollar Exchange Rates
Notes and Commentary: People - Economy - Government and Political Conditions - Historical Highlights - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Climate
Current Time
Ranking Positions
East Caribbean Dollar Exchange Rates


Notes and Commentary
People
Economy
Government and Political Conditions
Historical Highlights
Foreign Relations
Relations with U.S.





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