IMF projects Dominican economy to grow 4.2 % in 2023

The International Monetary Fund (IMF) projects that the economy of the Dominican Republic will grow 4.2% in 2023, a percentage slightly lower than the 4.4% reported last week by the World Bank.

The IMF also projects that inter-annual inflation in the Dominican Republic will close the year at 4.9%, higher than the target range of 4% ± 1% that the country’s Central Bank has set for itself. By 2024, it will drop to 4 %.

The Dominican Republic’s inter-annual inflation projection for 2023 is below that of the entire Latin American and Caribbean region, which the IMF indicates would be 11.8%.

It is also still below the regional 7.7% projected for 2024.

Raise taxes on the rich.
The International Monetary Fund believes that Latin American countries should implement tighter fiscal policies, raising, for example, taxes on the rich, to contain high inflation and thus take some weight off central banks in their monetary policy.

“A more contractionary fiscal stance would help curb domestic demand, allowing interest rates to fall sooner,” the institution said yesterday in a regional note issued on the occasion of the Fund’s spring meetings with the World Bank, which are being held in Washington.

The advice aligns with the IMF’s message during the meetings, in which it has called for a tightening of fiscal policy to complement monetary policy at a time when high rates and global uncertainty are weighing down growth.

For the deputy director of the agency’s Western Hemisphere Department, Nigel Chalk, the persistence of inflation probably means that “interest rates will have to remain high for longer than we initially thought.”