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Caribbean Islands Table of Contents

Caribbean Islands


Macroeconomic Overview

Dominica's gross domestic product (GDP--see Glossary) totalled US$88.2 million in 1985. This figure represented a 3-percent increase over the previous year and was consistent with the pattern that had emerged for 1982-84. GDP growth rates had averaged 11.3 percent per year for 1980 and 1981; however, these rates were largely achieved through substantial external aid provided in the wake of the devastating hurricanes of 1979 and 1980. Per capita GDP averaged US$1,132 in 1985.

The government made substantial progress in the 1980s in controlling inflation. In 1980 the consumer price index increased by 30.5 percent over the previous year. This increase resulted from shortages following the hurricanes, high wage settlements, and the effects of the second round of oil price increases on the international economy. The index dropped sharply to 13.3 percent in 1981 and then to 4.4 percent in 1982; by 1985 the rate of inflation was barely 2.1 percent. Favorable international trends, especially the easing of the rate of increase in import prices, and increases in domestic foodstuffs were primarily responsible for the improvement. The consumer price index increased slightly by 3 percent in 1986. Substantial increases in clothing, footwear, meat, fish, and dairy products were largely mitigated by lower fuel prices.

According to the 1981 census, Dominica had an economically active population of 25,000; 18.5 percent of this population was unemployed. Unemployment was particularly high among the 15- to 19- and 20- to 24-year age groups, with rates of 55.7 and 23.8, respectively. The two sectors contributing most to employment remained agriculture and government. Between 1978 and 1981, the number of workers employed by government decreased marginally from 5,751 to 5,433 or from 32.4 percent of the workforce to 31.9 percent. The decrease was more significant in agriculture, which employed 4,517 workers in 1978 and 3,294 in 1981, a shift from 25.5 percent of the workforce to 19.3 percent. During that same period, however, the number of farmers increased from 11,000 to 14,000. This possibly indicated that more agricultural workers became fulltime farmers in response to land distribution programs, improved farm credit, and stable banana prices in the late 1970s. Dominican wage rates compared unfavorably with the general levels found elsewhere in the Commonwealth Caribbean. In 1984 the minimum wage for a 40-hour week was raised to US$27.55.

Data as of November 1987