Minister of Economy, Planning and Development Meets with IMF Mission

Minister of Economy, Planning and Development Meets with IMF Mission
Santo Domingo, 11/06/2010

Juan Temístocles Montás, Minister of Economy, Planning and Development met with a delegation from the International Monetary Fund (IMF). Montás and IMF officials took stock of the country’s economic situation and, above all, at the consequences the international economic situation may have on the Dominican Republic. The international mission was clear that “the Dominican economic situation has recovered and is now in expansion mode.”

“With this level of primary surplus, the public debt level in proportion to the GDP will fall slowly in such a way that today we have a moderate debt and a program that, in a coherent fashion, causes this debt to fall slowly and gradually,”

Minister Montás said President Leonel Fernández is committed to the IMF’s program as a requirement for maintaining economic stability of the Dominican Republic. From his part, Alejandro Santos, IMF representative in the DR, confirmed that the level of the public debt is moderate, according to the Presidential Office of Information, Press and Publicity.

Santos said looking at the issue within the regional and international context, “the level of debt in the Dominican Republic is moderate; in this region debt levels are much higher,” he said citing Jamaica and other islands in the area with debt higher than 80% of their GDP.

“Here we are talking about a debt level of 35 % of the GDP. It is worth noting that it is moderate and what the authorities have been able to aspire to is to have a fiscal expansion policy that was done at the end of last year and the first half of this year which has turned around a weak economy in 2009 and ushered in recovery and expansion,” added the IMF executive.

Santos said he welcomes the economic rebound in an atmosphere that has managed to maintain macroeconomic consistency, a relatively low inflation rate, lower than expected from the Central Bank, the fact that the DR continues implementing reforms and the way it changed the public sector deficit. Mr. Santos made these statements to the press who was covering the National Palace following his meeting with Juan Temístocles Montás.

He added that the fiscal policy applied last year will need to be recovered in a very gradual way in order to be applied again in the future, in the event it proves necessary, “and this is what we are talking about now.” He pointed out that the stand-by program foresees a 2% surplus of the GDP with a projection of 1% in 2011 and 2% of the GDP for 2012.

“With this level of primary surplus, the public debt level in proportion to the GDP will fall slowly in such a way that today we have a moderate debt and a program that, in a coherent fashion, causes this debt to fall slowly and gradually,” he told reporters.

The government seeks to increase earnings, said Santos, but also wishes to reduce spending because “the economy has managed to recover in a surprising way.”

The IMF, as part of the recently approved changes, has released some $250 million US dollars of the $1.7 billion scheduled to be disbursed with each quarterly approval.

Also present at the meeting were Economy, Planning and Development Ministry advisors Magdalena Lizardo, Luis Reyes and Ramón Tarragó. On the part of the IMF were Mario Dehesa-Dávila, the new IMF representative in the DR; Juliana Dutra Araujo, Ali Richi and Raphael Espinoza.