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Caribbean Islands Economy
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
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