Budget and Public Investment Plan Approved for 2010

Budget and Public Investment Plan Approved for 2010 
Santo Domingo, 9/21/2010

 “We are going to have a minor deficit, a National Budget nominally higher but in relative terms less than this year, we are going to have less financing with the 18 billion pesos but expenses will only increase by 15 billion,”

Dominican President Leonel Fernández on Monday headed a Government Council where the National Budget and General Law for Investment and Public Expenditures was approved. The National Budget for the coming year is in excess of 390,475 billion pesos which represents an 11,478 peso increase from the 2010 budget.

This news was announced by Finance Minister Vicente Bengoa following the meeting held in the National Palace. Mr. Bengoa explained that the Government Council approved the budget in addition to a three-year Public Investment Plan for 2010-1013. Bengoa explained that for 2011,  State institutions with large budget concerns with relation to this year’s National Budget are the Ministry of Health and the Ministry of Education.

He said the Ministry of Education approved a sum of 41.568 billion pesos which represents an increase of some 4.917 million as the budget for 2010 was some 37.428 billion pesos, according to the Presidential Office of Information, Press and Publicity.
Bengoa added that the Ministry of Public Health and Social Assistance will have a budget of 41.917 billion pesos in the coming year, up 5.883 with respect to the 36.033 billion pesos it received in 2010.

He observed that the institutions that will undergo budgetary cutbacks in 2011, from its 2010 parameters, includes the Office of the Presidency of the Republic which will only receive some 36 billion pesos which represents a reduction of 6.975 billion pesos.

He argued that in absolute and relative terms, the government’s quasi fiscal deficit for 2011 will undergo a significant reduction with an expected 1.6% drop in GDP which this year will end at 2.5%.

As such, the Minister of Finance explained that other important indicators for the coming year include government spending that is expected to increase by some 30.183 million pesos and it is estimated that they will give to the government nearly 289.351 billion pesos.

Vicente Bengoa indicated that government expenses will only rise by some 15.903 million pesos, saying that expenses for 2011 will increase by less than half of what was collected in taxes, which will be seen in the deficit reduction.

 “We are going to have a minor deficit, a National Budget nominally higher but in relative terms less than this year, we are going to have less financing with the 18 billion pesos but expenses will only increase by 15 billion,” he said.

To calculate, he said, for next year’s budget, the authorities came up with a fixed exchange rate of 37.90 and the price of oil is projected at 83.50, according to figures done by the International Monetary Fund.

In terms of operating expenses, Bengoa said the same will increase for the next year by some 23.844 billion pesos, surpassing the 225.534 million of 2010 by 379 million as expected in 2011.  

In this sense, he explained that this increase is due to the transference to the Central Bank of some 4 billion pesos to help deal with the quasi fiscal deficit.
He explained that for the Law of Capitalization of Transference to the Central Bank, they exceeded 18.859 billion pesos while for the Dominican Corporation of State Electric Companies have contemplated the transfer of $469 million dollars, for current expenses such as for investments.