Dominican Republic economy improves but country sinks further into debt.
| Autor | Giron, Crosby |
The country's economic performance has been good. During the first nine months of 2014, the economy grew by 7%, and between 2013 and 2014 more than 165,000 people found employment, said Central Bank director Hector Valdez Albizu at the end of October. He added that unemployment was down 1%, reaching 6%, and that more than 500,000 people had "overcome" poverty.
Valdez Albizu is not the only optimist. In mid-November, the International Monetary Fund (IMF) admitted that the country was experiencing a period of bonanza. Przemek Gajdeczka, who visited the country Nov. 3-12, told a news agency that "the short-term perspectives appear to be more favorable than was anticipated during the consultation of Article IV for 2014." Gajdeczka visited the Dominican Republic as part of the periodic reviews that the IMF carries out.
The construction and tourism sectors also experienced significant growth. The IMF expects that the country will end 2014 with a 6% economic growth and that inflation will remain low, as it has done so far, at 2.9%. It also foresees a favorable scenario for 2015 because of the decrease in oil prices, crucially important for a country that imports fuel.
The IMF expressed satisfaction that the Dominican Republic had set itself the goal of increasing its gross reserves "to bolster the economy's ability to resist external shocks," said Gajdeczka.
Nevertheless, the external debt remains one of the problems that President Danilo Medina has yet to resolve. Medina's fiscal-reform proposal, put forward in 2012, aimed to reduce the country's fiscal deficit, which amounts to around US$3.7 billion.
Debt will amount to 50% of the country's GDP
Although the IMF has expressed satisfaction with the country's economic performance, it has also recommended that the country should maintain its current borrowing capacity. Not in vain did the IMF mission recommend that the Dominican Republic "should continue its fiscal consolidation process in order to improve the sustainability of the debt and reduce the need for incurring in external debt."
The Quarterly Report on the Situation and Evolution of the Public Debt for July-September 2014 found that the country's external debt totaled more than US$4 billion. The total debt (both internal and external) of the nonfinancial public sector, said the report, totaled US$24.1 billion, US$438.5 million more than the US$23.7 billion reported on June 30, 2014, meaning that it increased by 1.9%.
The Dominican...
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