IMF delegation suggests that the country implement reforms
The delegation of the International Monetary Fund (IMF) that evaluated the economy, as part of the consultation of Article IV of the Dominican Republic 2021, suggests implementing several reforms that guarantee sustained growth that is inclusive.
The IMF mission, headed by Esteban Vesperoni, head of the Dominican case, said that the application of well-sequenced reforms would promote sustained and inclusive growth, supported by an expansion of the tax base, elimination of tax exemptions, and the approval of financial responsibility law.
These reforms should include policies to recapitalize the central bank, achieve a sustainable electricity sector, and strengthen regulations in the financial industry, including financial supervision of cooperatives.
In addition, it increases the effectiveness and targeting of social support programs and facilitates job placement, and strengthens the application of the social security law.
“The Dominican Republic has been one of the most dynamic economies in the region during the last decade in the context of robust growth, macroeconomic stability, a solid external position and a notable improvement in social indicators. This performance was supported by the continuous improvement of macroeconomic frameworks, investment climate, and financial stability,” concluded Vesperoni.
A team from the International Monetary Fund led by Vesperoni held virtual meetings from April 21 to May 5, 2021, with the authorities, development agencies, and representatives of the private sector in the Dominican Republic to prepare the Article IV Consultation of 2021, explains a document from the Central Bank.
Vesperoni highlighted the excellent performance of the Dominican economy, the advance of vaccination and reiterated the projection of GDP growth of 5.5% at the end of this year, as well as recommended as a short-term measure to maintain the balance to guarantee the sustainability of debt with policies that allow the gradual withdrawal of support, control of non-priority expenditures and contingency planning.
They also state that as the impact of the pandemic recedes, the economy would benefit from reforms to reinforce medium-term policies. The authorities’ commitment to fiscal and electricity sector reforms adequately points to the need to ensure debt sustainability.
They also acknowledge efforts to improve public financial management, transparency in the execution and reporting of public spending, and reforms to improve efficiency in public administration, which can generate social support for other reforms.
A statement from the Ministry of Finance also reported that the IMF mission stated that the Dominican Republic is one of the most dynamic economies in the region during the last decade due to its solid macroeconomic stability, its firm external position, and notable improvements in the aspects promoted through a favorable investment climate, financial stability, and macroeconomic frameworks.
There are also the fiscal measures in relation to the increase in public spending on the health sector and the vaccination plan, the implementation and extension of transfers to low-income and unemployed households until early 2021, and the deferral of tax payments.