IMF says Dominican Economy is recovering

posted on: Feb 17 2010 9:32 by Royston. Viewed 468 times.


The International Monetary Fund (IMF), admitted that monetary conditions have improved significantly in the Dominican Republic after a contraction and described as "positive" the contingency agreement  in force between IMF and the DR.

The IMF also considered that the Dominican Republic has enough capacity to meet demands for exports to neighboring Haiti, devastated by the Jan 12 earthquake.

The agency noted that although the Dominican economy is weak, recovery in the last months of 2009 was obvious due to growth of 3.5% in the Gross Domestic Product (GDP), the stabilization of the foreign exchange market and inflation of 5.8%.

"Monetary conditions have improved significantly (in D.R.). After a contraction, loans to the private sector recovered in late 2009 and expanded by about 8.5 percent for the year," said the  report, which summarizes a two-week visit made by an IMF mission to the Dominican Republic.

The document revealed that, although some deviations were detected to the aims established in 2009,  policies originally envisaged in the 2009 program are being maintained.

The Dominican Republic signed the agreement last November with the IMF, in order to cover the deficit caused by the fall in revenues attributed to the crisis in the international economy.

"The mission made significant progress in the talks and will make the final assessment of the review in Washington in the coming weeks," the statement said, referring to plans by the IMF and the Dominican authorities to draft a letter of intent for the implementation of the policy agreement in 2010.

Criticisms:
The IMF, however, did criticize two areas where the aspirations of 2009 had not been met; the limit on fiscal deficit of the central administration and settlement of arrears to electricity generators
.
In addition, the organization said that with regard to the international community's efforts to rebuild Haiti, he expected the active participation of the Dominican Republic which could increase net exports in the future. �The economy has enough spare capacity to cope with this potential increase in demand," stated the report.

"The fiscal deficit of the consolidated public sector reached nearly 4.5 percent of GDP in 2009, in line with the authorities' economic program, while the central government's fiscal deficit reached 3.5 percent of GDP due mainly to increased transfers to the electricity sector and a reduction in revenues," said the agency.

14 related news articles

Country on its knees?: Jul 8 2011

IMF is satisfied with the course of the Dominican economy: Nov 10 2010

Government and IMF reach agreement on reducing electricity subsidy: Sep 4 2010

Infrastructure program adjusted in line with IMF accord: Aug 29 2010

Review of electricity sector with IMF, WB and IDB: Jun 9 2010

IMF predicts growth of 5.5% in Dominican economy: Jun 2 2010

Central Bank says economy will grow without inflation : Apr 27 2010

Dominican economy lags behind the region: Apr 22 2010

IMF approves Government�s application and awards US$120m this week: Apr 8 2010

Government requests waivers from IMF: Mar 29 2010

Billions of dollars in bonds for road works: Mar 4 2010

Government fails to reduce debt to electric companies, crisis deepens: Feb 18 2010

US Treasury calls for full cancellation of Haiti debt: Feb 8 2010

G-7 urged to cancel Haiti debt: Feb 6 2010