NewsWhore
10-19-2011, 04:00 PM
In the National Budget fast-tracked by the Chamber of Deputies yesterday, the Dominican government authorizes taking on external and internal debt for RD$41.29 billion in 2012, according to analysis by economist Nelson Suarez reported in acento.com.do. The money is being allocated to pay public debt and to cover electricity subsidy disbursements. The new debt would be 9.6% of the Budget of RD$430 billion and 1.7% of the GDP estimated for next year.
In Art. 25, Paragraph II of the 2012 Budget, the government estimates making debt payments for RD$55.71 billion.
To finance the RD$55.71 billion, the government will use RD$7.6 billion of funds from the General Fund (13.6%), RD$14.87 billion from Special Destiny Funds (26.7%) and RD$33.24 billion in loans from banks and international and foreign investors (59.7%), as allotted in the 2012 Budget Bill. The government proposes to place RD$22.36 in domestic credit and RD$10.88 billion in foreign funds.
Acento reports that the amounts are being assigned despite a negative experience in this sense for the 2011 budget. Acento says that in 2011 the government had to reduce most government departments' procurements by 12% to increase by RD$19 billion the funds originally assigned to the electricity subsidy. Nevertheless, in the 2012 budget, the government only projects RD$10.68 billion for the subsidy.
Suarez observes that it would be important to establish whether the Dominican authorities are about to conclude an advantageous debt swap operation at an unfavorable rate for one at a lower interest rate and better conditions, or whether it is only about fulfilling debt payment obligations, regardless of the financial conditions.
The economist makes the point that the funds allocated to cover the electricity subsidy will be borrowed, as per the 2012 Budget.
He writes: "The funds appropriated in the National Budget 2012 to cover the electricity subsidy are RD$10.68 billion. To finance this commitment the government plans to use RD$2.63 billion of the General Fund and RD$8.05 billion of funds from the PetroCaribe Agreement. This means that 75.4% of the subsidy will be covered by taking on debt." He makes the point that for the 2011 fiscal year the authorities had budgeted RD$13.65 for the electricity subsidy but at the half year point budget modifications were introduced to increase electricity appropriations by RD$20.75 billion, for a total RD$34.40 billion.
www.acento.com.do/index.php/news/8206/56/Presupuesto-2012-El-Gobierno-se-endeudara-con-RD-41-mil-292-millones-mas.html (http://www.acento.com.do/index.php/news/8206/56/Presupuesto-2012-El-Gobierno-se-endeudara-con-RD-41-mil-292-millones-mas.html)
More... (http://www.dr1.com/index.html#3)
In Art. 25, Paragraph II of the 2012 Budget, the government estimates making debt payments for RD$55.71 billion.
To finance the RD$55.71 billion, the government will use RD$7.6 billion of funds from the General Fund (13.6%), RD$14.87 billion from Special Destiny Funds (26.7%) and RD$33.24 billion in loans from banks and international and foreign investors (59.7%), as allotted in the 2012 Budget Bill. The government proposes to place RD$22.36 in domestic credit and RD$10.88 billion in foreign funds.
Acento reports that the amounts are being assigned despite a negative experience in this sense for the 2011 budget. Acento says that in 2011 the government had to reduce most government departments' procurements by 12% to increase by RD$19 billion the funds originally assigned to the electricity subsidy. Nevertheless, in the 2012 budget, the government only projects RD$10.68 billion for the subsidy.
Suarez observes that it would be important to establish whether the Dominican authorities are about to conclude an advantageous debt swap operation at an unfavorable rate for one at a lower interest rate and better conditions, or whether it is only about fulfilling debt payment obligations, regardless of the financial conditions.
The economist makes the point that the funds allocated to cover the electricity subsidy will be borrowed, as per the 2012 Budget.
He writes: "The funds appropriated in the National Budget 2012 to cover the electricity subsidy are RD$10.68 billion. To finance this commitment the government plans to use RD$2.63 billion of the General Fund and RD$8.05 billion of funds from the PetroCaribe Agreement. This means that 75.4% of the subsidy will be covered by taking on debt." He makes the point that for the 2011 fiscal year the authorities had budgeted RD$13.65 for the electricity subsidy but at the half year point budget modifications were introduced to increase electricity appropriations by RD$20.75 billion, for a total RD$34.40 billion.
www.acento.com.do/index.php/news/8206/56/Presupuesto-2012-El-Gobierno-se-endeudara-con-RD-41-mil-292-millones-mas.html (http://www.acento.com.do/index.php/news/8206/56/Presupuesto-2012-El-Gobierno-se-endeudara-con-RD-41-mil-292-millones-mas.html)
More... (http://www.dr1.com/index.html#3)