Govt.’s ‘race to debt’ leads country to a ‘dark dead end’

Santo Domingo.- Academicians of the Santo Domingo Technological Institute (INTEC) School of Economics, on Tues. warned that the Government’s continued ‘race for loans” and debt,  the country will enter a “dark dead end ” in the medium term.

The economists Franklin Vásquez, and Rafael Espinal made the warming when presenting the fourth report of the Dominican Economy (IED), and noted that, as of 2018, the weight that the debt service poses as a percentage of government spending is worrisome.

“In the budget recently approved by Congress, debt service accounts for 42.5% of public expenditure, when in 2007 it barely accounted for 24.3 of spending. This policy of medium-term indebtedness will be taking the economy to a risk situation, which will make the placement of bonds in the financial markets more and more costly,” the experts said in a statement.

They assure that in 2018 bonds will be issued for RD $ 68 billion locally and US $ 1,500 million in the international market to help finance the indicated fiscal shortfall, equivalent to 2.2% of GDP.

“Undoubtedly, the policy of continuous increase in indebtedness, close to 3 billion dollars contemplated in the budget, creates deep concerns among INTEC’s economic team,” Espinal told the journalists present.