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A view of the capital of Dominica, Roseau. (Photo: Global Partnership for Education)

CariCRIS reaffirms Dominica’s debt rating, revises outlook to negative

A view of the capital of Dominica, Roseau. (Photo: Global Partnership for Education)

CariCRIS this week reaffirmed the debt rating of the Government of the Commonwealth of Dominica (GOCD) at CariBB (foreign and local currency) on the regional scale.

“These ratings display ‘below-average’ creditworthiness relative to other debt obligors in the Caribbean. The ratings of GOCD are tempered by widespread negative COVID-19 impacts on a small, developing country with significant capacity constraints, weaknesses in the financial sector, uncertainty of fiscal outcomes for the next two years and urgent balance of payments pressures as a result of COVID-19,” a release read.

The ratings also reflect the significant progress that the Government has made to rebuild the country’s economy and infrastructure after the passage of Hurricane Maria, as well as satisfactory debt servicing and a stable political environment.

With uncertainty surrounding a strong rebound in tourist arrivals, CariCRIS has revised Dominica’s economic outlook to negative.

Still, CariCRIS revised the GOCD debt from stable to negative, noting uncertainty of a return to sufficient economic growth in 2021.

“It is unclear whether tourist arrivals for the rest of 2020 and for 2021 will be robust enough to offset the impact of higher indebtedness incurred to finance COVID-19 related spending and/or to return the GOCD to pre-COVID19 fiscal revenues,” CariCRIS stated.

Roseau, the capital of Dominica, suffered devastating damage from Hurricane Maria. (Photo: STR/AFP/Getty Images)

Based on the uncertainty hanging over the Dominica’s economy, the ratings agency asserts that this may also affect foreign exchange availability, financial sector soundness and employment.