RATING DRIVERS
Constraining Factors
- Small developing country with significant capacity constraints
- Weaknesses in the financial sector, particularly the non-bank financial institutions
- Fiscal recovery hampered by COVID-19
Supporting Factors
- External position remains solid, despite exports decline
- GDP, supported by CBI inflows and continued post-hurricane rebuilding, is expected to rebound quickly from COVID-19
- Stable political environment
Rating Sensitivity Factors
Factors that could, individually, or collectively lead to an improvement in the ratings and/or Outlook include
- Growth in economic activity of 5% or more above pre-Hurricane Maria levels, sustained for at least 3 years.
- A fiscal surplus of more than 5% recorded for 2 consecutive fiscal periods
Factors that could, individually, or collectively lead to a lowering of the ratings and/or Outlook include
- Debt/GDP ratio exceeding 100% for another 2 years
- Economic and social disruption caused by natural disasters
- Material reduction in grants and multilateral funding
SOVEREIGN BACKGROUND
Dominica is an island-nation located in the Eastern Caribbean with a total population estimated at approximately 71,000[1] persons. The official language is English but French patois is also spoken. The primary economic sectors are agriculture, government services and wholesale & retail trade. Dominica is mountainous and volcanic with tropical rainforest covering two thirds of the island.
Dominica has experienced to two major natural disasters in recent years: Tropical Storm Erika (2015) and Hurricane Maria (2017). Hurricane Maria delivered a devastating blow while the country was still consumed with rehabilitation efforts following Tropical Storm Erika. The destruction caused by these two natural disasters – Tropical Storm Erika (90% of GDP) and Hurricane Maria (298% of GDP) – though severely removing productive capacity, has spurred construction activity and gives opportunity to put in place greater climate resilient infrastructure.
[1] According to the World bank estimates as at 2019.
Analytical Contacts:
André Joseph
Tel: 1-868-627-8879 Ext. 224
Mobile: 1-868-788-4693
E-mail: ajoseph@caricris.com
Stefan Fortuné
Tel: 1-868-627-8879 Ext. 228
E-mail: sfortune@caricris.com
Website: www.caricris.com
Email: info@caricris.com
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