Current accounts deficit balloons

[NewsWhore]

Former Central Bank director Carlos Despradel estimates that the DR's current account deficit will equal US$4 billion in 2008, US$2 billion more than in 2007, as reported in Hoy. He says that last year's deficit was covered by the flow of direct foreign investment. Despradel says that his forecast is conservative and depends on petroleum prices and consumption remaining at the current levels. Adding to concerns, Despradel said that in 2007 the trade deficit was US$9.4 billion, but when other dollar expenditures, such as repatriation of foreign investment dividends and the payment of foreign debt interests are added, this adds up to US$11.6 billion. Last year he said the deficit was covered by tourism receipts (US$4 billion) and free zone receipts (another US$2 billion). "The true deficit was US$5.6 billion, the difference between what we Dominicans produced and what we consumed," he said on the Uno + Uno Telesistema TV program. According to Despradel, the continued flow of remittances has been the nation's escape valve.
Despradel mentioned that the country would have to pay US$2 billion more on petroleum imports, providing that fuel consumption remains the same. Furthermore, he said the country has increased its overall imports by US$1.2 billion.

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