Prime Minister Roosevelt Skerrit  addressed Government’s fiscal management, providing clarity on Dominica’s economic position in an address to Parliament on Friday, April 10, 2026. His remarks followed the March 27 Article IV report of the International Monetary Fund.

Citing the IMF’s assessment, Prime Minister Skerrit noted that real GDP growth accelerated to 4.5 percent in 2025, up from 3.5 percent in 2024, driven by strong tourism performance and sustained public investment. Inflation, he added, has eased to 2.3 percent, reflecting improving economic conditions.

While acknowledging that the current account deficit remains elevated, the Prime Minister explained that this is largely the result of increased imports linked to major infrastructure and resilience projects as well as investments in social safety net programmes designed to support vulnerable families and households.  He emphasized that these investments, though impacting short-term fiscal balances, are critical to Dominica’s long-term development.

Prime Minister Skerrit argued that the concept of the primary balance was widely misunderstood in public discourse. He explained that the primary balance measures the difference between Government’s revenue and expenditure, excluding interest payments on debt, and serves as an important indicator of fiscal discipline and sustainability.

“For Dominica, this is especially important given our high public debt; our exposure to external shocks like natural disasters and global crises; and our dependence on imported goods and services,” he explained.

He noted that in the aftermath of recent crises, including hurricanes, the COVID-19 pandemic and global inflation, Dominica recorded significant primary deficits averaging approximately 4.3 percent of GDP. However, through targeted fiscal consolidation efforts, the country has now returned to a primary surplus position.

According to the IMF report, Dominica is currently recording a primary surplus of 0.7 percent of GDP, equivalent to approximately $14.7 million.

The Prime Minister also addressed the IMF’s recommendation that Dominica increase its primary surplus to 3.4 percent of GDP over the medium term to strengthen fiscal resilience, reduce debt and build financial buffers against natural disasters.

However, he cautioned that achieving this target requires careful policy choices and a delicate balance between fiscal discipline and national development priorities.

“Let us all be clear, achieving and maintaining a healthy primary surplus requires careful policy choices. Like raising revenue through additional taxation and/or enforcement of compliance with tax responsibilities, controlling recurrent expenditure and prioritizing capital investment.

“This creates policy tension between fiscal policy and the welfare of the human being,” he stressed.

He said measures such as VAT and duty waivers on essential goods are designed to ease the cost-of-living burden and protect citizens during periods of economic stress but noted that while these measures provide immediate relief to households, they also reduce government revenue.

“We are making steady progress in the responsible, sustainable, people-centered management of the nation’s finances. Maintaining this trajectory will require continued discipline, strategic prioritization and a balanced approach that safeguards both economic stability and the welfare of our people,” the Prime Minister stated.