IMF estimates the country’s economy exhibits a “robust performance”

The executive board of the International Monetary Fund (IMF) considered yesterday that the Dominican economy is experiencing a robust performance and does not present significant imbalances or sustainability problems.

The international organization recently approved the evaluation corresponding to the Article IV mission for the Dominican Republic in 2022, this time without the need to hold an ordinary meeting.

In the report mentioned above, published on July 8, 2022, the IMF highlights the dynamism of the Dominican economy and its remarkable resilience, achieving a solid recovery, expanding 12.3% in 2021 and approximately 5% in relation to the level before the pandemic.

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The document indicates that this economic growth contributed to solid job growth, highlighting that the economy’s excellent performance was supported by adequate policies, an effective vaccination campaign, and a well-managed process of reopening the productive sectors.

He also cites the remarkable dynamism of the tourism sector, with a faster recovery than expected in the arrival of visitors, which has exceeded pre-pandemic levels.

The IMF positively assessed the role of expansionary monetary policy and its contribution to the recovery during 2021 and, subsequently, in normalizing economic conditions to face inflationary pressures.

It expects inflation to moderate gradually until it converges to the target range of 4% ± 1% during 2023.

It also considers the consolidation process of public finances adequate, significantly reducing general debt.

He highlighted the increase in tax revenues and the expansion of key social programs to support the most vulnerable sectors.

According to the IMF technical team, the macroeconomic fundamentals of the Dominican Republic remain strong, with a current account position that is comfortably financed by Foreign Direct Investment, higher levels of international reserves, and a financial system that satisfactorily exceeded the difficult test of the pandemic.

positive outlook

Regarding the perspectives, the team of the multilateral organization considers that, despite the high level of international uncertainty, the outlook for the Dominican Republic is positive, foreseeing a growth around the potential of 5.0%, both for this year and for the next year 2023.

The report pointed out that the risks in the short term are related to the evolution of the war between Russia and Ukraine, international financial conditions that have become more restrictive, and the possible emergence of new variants of COVID-19.

Meanwhile, in the medium term, the scenario for the Dominican economy is favorable, states the IMF, which understands that investment opportunities, infrastructure improvements, and the various reforms underway would contribute to increasing the potential growth of the economy of the Dominican Republic.

The IMF team positively weighs the electricity sector reforms, supporting the most vulnerable sectors through targeted programs while saluting the efforts to improve policy, governance, transparency, and business climate frameworks. The international organization states that the continued implementation of these measures would send a solid commitment to long-term policies, promoting growth and allowing consensus to be built for future reforms.

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Highlights support for the electricity sector

Targeting.

The IMF team weighs positively on the reforms of the electricity sector, maintaining support for the most vulnerable sectors through targeted programs.

Coincidence.

The Central Bank of the DR agrees with the vision expressed by the IMF and reiterates its commitment to act proactively to make decisions that contribute to maintaining macroeconomic stability and sustained growth.