BARBADOS/DOMINICA – The board of directors of the Caribbean Development Bank (CDB) on Thursday approved a US$20-million loan for Dominica to help close financing gaps, which have widened due to the COVID-19 pandemic.
The country, still reeling from the devastation of Tropical Storm Erika in 2015 and hurricane Maria in 2017, which caused an estimated loss of 90 percent and 226 percent of gross domestic product (GDP), respectively, was hit hard by the outbreak of the global pandemic. Tourism, which in 2019 accounted for 36.9 percent of GDP, came to an abrupt halt. The closure of the country’s borders and the imposition of a lockdown for non-essential workers from mid-March to June 2020 to contain the spread of the virus, caused a sudden stop to commercial flights, cruise ships calls, and the closure of hotels.
“This has been a difficult year for the government and people of Dominica. However, the indications are for improvements in the near term, with reconstruction activity expected to lead the rebound next year. CDB remains committed to supporting Dominica recovery and alleviating the harsh impact of the crisis especially on vulnerable groups, such as single heads of households, children, unemployed youth, the elderly, and people with disabilities”, said CDB president Dr William Warren Smith.
Dominica has experienced an estimated ten percent-downturn in its economy in 2020, which has driven up poverty in the country. In addition, remittances from abroad, which account for 8.5 percent of GDP, are projected to fall by EC$2 million to EC$47 million in 2020. The pandemic has caused disruption in health, social services, and education, and has already stretched the social protection system.
Although prospects for a rapid return to pre-crisis levels of economic activity are uncertain in Dominica, reconstruction after the storms that hit the island in recent years, and investments in resilient economic and social infrastructure will be the main drivers of the economy. CDB estimates that economic growth will return in 2021.
