NewsWhore
04-25-2008, 05:10 PM
Economist Bernardo Vega speculates that there has been a fiscal deficit in the first months of the year due to an increase in government subsidies, public employee payroll and social spending in the run-up to the 16 May election, as reported in Hoy. Vega was addressing a workshop on "Prospects for the Dominican Economy 2008" organized by the National Young Entrepreneurs Association (ANJE). He commented that the government has not published the monthly budget allocation statements as is customary. He said that if there had not been a deficit, the statements would have been published, as reported in Hoy. Vega feels that there has been a considerable increase in money in circulation, and thus the Central Bank's injection of US$100 million of international reserves into the exchange market. The eminent economist says that tourism and international remittances have yet to show the effects of the US recession and international market difficulties. On the contrary, he says that foreign investors have brought their money here, seeking greater yield for their capital.
Meanwhile, fellow economist Jose Luis de Ramon commented that the effects of the international crisis are already being felt. He said that the country could see a US$2.5 billion trade balance deficit. He described the 5.4% deficit of the Gross Domestic Product in the current account of the 2007 trade balance as "alarming", and said this will not change in 2008. He commented that prices have increased 9.89% in the five month spread from November 2007 to March 2008, more than in all of 2008, when inflation closed at 8.55%. De Ramon believes that the country will depend on whether it continues to be attractive to foreign investors and savings that can be secured in fuel imports. Direct Foreign Investment grew by 52% in 2007. The economist said that the present subsidies are distorting, and that it will be politically very expensive to eliminate the new subsidies on bread, fuel, free zones, food products and the Santo Domingo metro.
More... (http://www.dr1.com/index.html#4)
Meanwhile, fellow economist Jose Luis de Ramon commented that the effects of the international crisis are already being felt. He said that the country could see a US$2.5 billion trade balance deficit. He described the 5.4% deficit of the Gross Domestic Product in the current account of the 2007 trade balance as "alarming", and said this will not change in 2008. He commented that prices have increased 9.89% in the five month spread from November 2007 to March 2008, more than in all of 2008, when inflation closed at 8.55%. De Ramon believes that the country will depend on whether it continues to be attractive to foreign investors and savings that can be secured in fuel imports. Direct Foreign Investment grew by 52% in 2007. The economist said that the present subsidies are distorting, and that it will be politically very expensive to eliminate the new subsidies on bread, fuel, free zones, food products and the Santo Domingo metro.
More... (http://www.dr1.com/index.html#4)