Dominica is a small developing state confronting large economic imbalances, natural disasters (NDs), and substantial development needs amid slowing potential growth since the 1980s. Its narrow economic base and concentrated trade linkages leave it vulnerable to shocks that have pushed debt well above the 60 percent of GDP regional benchmark, heightening debt distress risks. The country is highly reliant on citizenship-by-investment (CBI) flows to fund strategic development projects, which have supported growth while exacerbating external imbalances given the high degree of imported inputs. With no independent monetary policy, fiscal policy is the primary policy tool, but weak institutional capacity hampers policy formulation, monitoring, and execution.
International Monetary Fund. Western Hemisphere Dept. (Mon,) studied this question.