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- GDP (PPP):
- $1.0 billion
- 0.8% growth
- 0.0% 5-year compound annual growth
- $14,283 per capita
- Inflation (CPI):
- FDI Inflow:
Dominica’s economic freedom score is 66.1, making its economy the 61st freest in the 2015 Index. Its overall score is 0.9 point higher than last year, due primarily to improvements in investment freedom, freedom from corruption, and monetary freedom. Dominica is ranked 11th out of 29 countries in the South and Central America/Caribbean region. It has recorded its highest economic freedom score ever in the 2015 Index, and its overall score is above the world average.
Over the past five years, economic freedom in Dominica has improved by 2.8 points, advancing in half of the 10 factors. Efforts to develop an offshore medical and financial industry have been assisted by improvements in labor freedom and an easing of the investment regime.
However, Dominica still falls short of the world average in the four economic freedoms in the areas of finance, trade, fiscal policy, and the management of government spending. Diversifying the economy from agriculture to services and ecotourism requires more serious restructuring, particularly in opening the economy to the global marketplace.
Dominica has a unicameral parliamentary government with a president and prime minister. Prime Minister Roosevelt Skerrit took office in 2004; his Dominica Labour Party was re-elected in 2009 and will face the voters again in 2015. In 2008, Dominica was among the first Caribbean nations to join the Bolivarian Alliance for the Americas (ALBA), a restrictive trade organization led by socialist Venezuela. ALBA’s continuing interference in the Caribbean Community (CARICOM) threatens to undermine progress in free-market democratic institutions and regional integration. In 2010, Dominica entered into an economic union with other members of the Organization of Eastern Caribbean States. In an effort to diversify the economy, the government encourages investments in non-traditional agricultural exports such as coffee, patchouli, aloe vera, exotic fruits, and cut flowers. It also plans to sign agreements with private-sector investors to develop geothermal energy resources.
Dominica does not have a major corruption problem, although anti-corruption statutes are sometimes not implemented effectively. It has an independent judiciary based on English common law, and private property rights are generally respected. Public trials are considered fair. Pirated copyrighted material is sold openly. Non-bank financial institutions are monitored to combat money laundering and the financing of terrorism.
Dominica’s top individual income tax rate is 35 percent, and its top corporate tax rate is 30 percent. Other taxes include a value-added tax and an environment tax. Overall tax revenue equals 22.6 percent of the domestic economy. Government expenditures are equivalent to 35.8 percent of domestic income, and public debt amounts to 75 percent of gross domestic product.
Incorporating a business takes about two weeks, and no minimum capital is required. Completing licensing requirements still takes over three months on average. The non-salary cost of employing a worker is moderate, but restrictions on work hours are rigid. An ongoing and comprehensive effort by government to restructure the economy includes the elimination of price controls.
Dominica’s average tariff rate is 8.6 percent. Government procurement rules can favor domestic firms. Foreign and domestic investors are generally treated equally under the law, but there are some restrictions on foreign ownership of land. The financial sector remains underdeveloped. Shallow capital markets and a lack of available financial instruments restrict overall access to credit.