Dominica - 2002 Article IV Consultation and Request for Stand-By Arrangement--Staff Report; Public Information Notice and Press Release on the Executive Board Discussion; And Statement by the Executive Director for Dominica (Electronic book text)

1. Dominica was struck by two hurricanes in 2007 and 2008 causing cumulative damage estimated at close to 35 percent of GDP. The agricultural sector, one of the major sources of foreign exchange earnings, took the brunt of the damage in 2007 from Hurricane Dean, while tourism, fishing and coastal infrastructure were affected by Hurricane Omar in 2008. Economic growth slowed to around 1 percent in 2007 before recovering to about 3 percent in 2008 (Figure 1 and Table 1). Inflation, mainly reflecting pass-through of energy and food price increases, peaked at 7 percent in September 2008, but has since receded to around 2 percent by end-2008 (inflation for the year averaged around 6 percent).1 The donor community responded by providing disaster relief grants to help address immediate humanitarian needs, and-with concessional financing from the Caribbean Development Bank-repair and reconstruction of essential infrastructure is well underway.