Economic and Financial Review - June 2019

June 2019 Economic and Financial Review THE COMMONWEALTH OF DOMINICA

Likewise, a primary deficit of $152.3m was realised, a deterioration from the deficit of $57.8m recorded in the first half of the previous year. The larger deficits were driven by developments on both the current and capital accounts and were mainly financed through funding from domestic sources. The current account surplus narrowed to $68.2m from one of $157.7m in the first half of 2018, largely reflecting a decrease in current revenue. Current revenue declined by 9.1 per cent ($36.6m) to $363.4m, mainly influenced by a 33.0 per cent ($67.5m) contraction in non-tax revenue to $136.8m, as a result of lower inflows from the Citizenship by Investment Programme. However, the falloff in current revenue was tapered by a 15.8 per cent ($30.9m) increase in tax revenue to $226.6m, predominantly because of higher inflows of taxes on income, profit and capital gains, as well as taxes on international trade and transactions. Taxes on income, profit and capital gains yielded $44.5m in revenue, which was $20.9m more than the total collected in the comparable period of the previous year. This higher amount collected was mainly influenced by a $31.5m increase in corporation tax revenue, a reflection of an

increase in business activity after the destruction caused by hurricane Maria. Receipts from taxes on international trade and transactions amounted to $52.3m, representing $8.7m more than the sum collected in the first six months of 2018. This increase was associated with a rise in revenue collected from import duty ($6.5m) and cruise ship passengers’ tax ($2.8m). Furthermore, there was an increase in revenue from taxes on property by $1.6m to $4.9m. The increase in tax revenue was however, partially offset by a 0.2 per cent ($0.3m) decline in the intake from taxes on domestic goods and services to $124.9m. Current expenditure grew by 21.8 per cent ($52.9m) to $295.2m in the period under review, reflecting greater spending on all sub-categories with the exception of personal emoluments, which fell by 2.1 per cent ($1.7m) to $77.9m. Payments for goods and services rose by 17.4 per cent ($16.2m) to $109.3m, partially associated with the rebuilding and maintenance of buildings, and the purchase of supplies. Also contributing to the expansion in current expenditure, were a 71.4 per cent upsurge in outlays for transfers and subsidies to $90.4m and a 4.3 per cent increase in interest payments to $17.6m.

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Eastern Caribbean Central Bank