 | |
| Murilo Portugal | |
BRIDGETOWN, Barbados, February 7, 2008 - The International Monetary Fund (IMF) will give the Dominican government US$3.3 million in emergency assistance to help it deal with the effects of Hurricane Dean which caused extensive damage to the island in August last year.
The loan approved earlier this week, is being made immediately available to the island, the IMF's Executive Board indicated.
The damage caused in Dominica by the hurricane is estimated at almost 20 per cent of the country's gross domestic product (GDP), with the agriculture sector feeling the brunt of the strong system.
"Economic growth is estimated to have slowed to around 1 percent in 2007 from a pre-hurricane forecast of 3 percent growth, while the loss in export earnings in 2007 and 2008 is estimated at 4 percent of GDP," the IMF indicated.
Deputy Managing Director and Acting Chair, Murilo Portugal acknowledged the setback which Hurricane Dean caused, noting that the country had been on an improved economic path.
"Prior to the hurricane, Dominica had significantly reduced fiscal imbalances under an economic program supported by the Poverty Reduction and Growth Facility (PRGF), which had helped reduce the external current account deficit and placed the public debt on a downward path," he said.
"However, with foreign exchange earnings impaired by the hurricane and significantly expanded imports of reconstruction materials, Dominica now faces large balance of payments financing needs."
Portugal noted that the government had responded swiftly and measures have been put in place to turnaround Dominica's economic position.
"The authorities plan to maintain the primary surplus target of three percent of GDP, financing reconstruction expenditure primarily through external grants. They intend to continue with the planned multiyear income tax reform at a pace consistent with their fiscal targets, while maintaining the integrity of the recently-implemented VAT," he said.
"The authorities' continued implementation of prudent policies, together with support from the international community, should help Dominica recover from the setbacks caused by the hurricane."
|
