NewsWhore
09-19-2012, 02:00 PM
Every newspaper in the country ran the same headlines: IMF says "it's not easy."
The head of the International Monetary Fund (IMF) mission, Przemek Gajdeczka, said yesterday, Tuesday 18 September that the main challenges the country faces are the rising fiscal electricity sector deficits. The IMF official said that the mission had reached this conclusion after ten days of meetings with government and Central Bank officials and civil society representatives.
Gajdeczka was speaking at a press conference at the Presidential Palace, after the IMF mission members held a half-hour meeting with President Danilo Medina and a commission of the government's economic team. During the meeting they shared some observations and their conclusions about the Dominican Republic's economic situation. According to Gajdeczka, the country's situation "is not easy," and that the mission would take the information gathered to Washington in order "to prepare their recommendations, improve their conclusions and their understanding of the current situation and work together with the Dominican authorities on redesigning the macro-economic policies."
At the meeting, President Danilo Medina was accompanied by Minister of Economy Temistocles Montas, Minister of the Treasury (Hacienda) Simon Lizardo, Central Bank Governor Hector Valdez Albizu, deputy minister of the Central Bank Clarissa de la Rocha and Presidency Minister Gustavo Montalvo. All the above, with the exception of Montalvo, were high-ranking economic officials in the previous Leonel Fernandez government.
The earliest a new accord could be signed is in the first quarter of 2013.
In release issued by the IMF states:
"The mission reviewed recent economic developments and discussed the near-term outlook for the Dominican Republic. This year, the economy has slowed down and inflation declined, while the fiscal and external positions remain weak. Real GDP growth was 3.8% in the first half of 2012 supported by agriculture, commerce and tourism. Inflation declined rapidly as the price shocks observed in 2011 were not repeated. Annual inflation in August was 2.2%, below the target range of 5.5% +/- 1 percent specified under the central bank's recently announced inflation-targeting regime.
"The fiscal position deteriorated in the first half of 2012. Revenues were boosted by one- off proceeds from the sale of Cerveceria Nacional Dominicana. Nevertheless, higher expenditure, including electricity subsidies, resulted in an overall deficit of the public sector of about 3.3% of GDP by June 2012 (compared to an annual target of about 2% of GDP in the original budget).
"Monetary policy has been eased in 2012 to support economic activity. The central bank lowered its overnight deposit rate during May-August by a total of 175 basis points (to 5%). The monetary aggregate M2 increased by 6% during December 2011- August 2012 while credit to the private sector in domestic currency declined slightly. At mid-September, gross international reserves stood at US$3.4 billion (about two months of imports), while the peso remained broadly stable in nominal terms since end-2011.
"The short-term macroeconomic outlook poses a challenge to the authorities, reflecting the need to strengthen the domestic macroeconomic framework, in particular to significantly tighten the fiscal position, and to cope with risks emanating from the global economy. Real GDP growth is expected to be around 4 percent in both 2012 and 2013, while inflation is projected to remain low."
www.presidencia.gob.do/app/do_2011/article.aspx?id=15710 (http://www.presidencia.gob.do/app/do_2011/article.aspx?id=15710)
imf.org/external/np/sec/pr/2012/pr12322.htm (http://imf.org/external/np/sec/pr/2012/pr12322.htm)
More... (http://www.dr1.com/index.html#1)
The head of the International Monetary Fund (IMF) mission, Przemek Gajdeczka, said yesterday, Tuesday 18 September that the main challenges the country faces are the rising fiscal electricity sector deficits. The IMF official said that the mission had reached this conclusion after ten days of meetings with government and Central Bank officials and civil society representatives.
Gajdeczka was speaking at a press conference at the Presidential Palace, after the IMF mission members held a half-hour meeting with President Danilo Medina and a commission of the government's economic team. During the meeting they shared some observations and their conclusions about the Dominican Republic's economic situation. According to Gajdeczka, the country's situation "is not easy," and that the mission would take the information gathered to Washington in order "to prepare their recommendations, improve their conclusions and their understanding of the current situation and work together with the Dominican authorities on redesigning the macro-economic policies."
At the meeting, President Danilo Medina was accompanied by Minister of Economy Temistocles Montas, Minister of the Treasury (Hacienda) Simon Lizardo, Central Bank Governor Hector Valdez Albizu, deputy minister of the Central Bank Clarissa de la Rocha and Presidency Minister Gustavo Montalvo. All the above, with the exception of Montalvo, were high-ranking economic officials in the previous Leonel Fernandez government.
The earliest a new accord could be signed is in the first quarter of 2013.
In release issued by the IMF states:
"The mission reviewed recent economic developments and discussed the near-term outlook for the Dominican Republic. This year, the economy has slowed down and inflation declined, while the fiscal and external positions remain weak. Real GDP growth was 3.8% in the first half of 2012 supported by agriculture, commerce and tourism. Inflation declined rapidly as the price shocks observed in 2011 were not repeated. Annual inflation in August was 2.2%, below the target range of 5.5% +/- 1 percent specified under the central bank's recently announced inflation-targeting regime.
"The fiscal position deteriorated in the first half of 2012. Revenues were boosted by one- off proceeds from the sale of Cerveceria Nacional Dominicana. Nevertheless, higher expenditure, including electricity subsidies, resulted in an overall deficit of the public sector of about 3.3% of GDP by June 2012 (compared to an annual target of about 2% of GDP in the original budget).
"Monetary policy has been eased in 2012 to support economic activity. The central bank lowered its overnight deposit rate during May-August by a total of 175 basis points (to 5%). The monetary aggregate M2 increased by 6% during December 2011- August 2012 while credit to the private sector in domestic currency declined slightly. At mid-September, gross international reserves stood at US$3.4 billion (about two months of imports), while the peso remained broadly stable in nominal terms since end-2011.
"The short-term macroeconomic outlook poses a challenge to the authorities, reflecting the need to strengthen the domestic macroeconomic framework, in particular to significantly tighten the fiscal position, and to cope with risks emanating from the global economy. Real GDP growth is expected to be around 4 percent in both 2012 and 2013, while inflation is projected to remain low."
www.presidencia.gob.do/app/do_2011/article.aspx?id=15710 (http://www.presidencia.gob.do/app/do_2011/article.aspx?id=15710)
imf.org/external/np/sec/pr/2012/pr12322.htm (http://imf.org/external/np/sec/pr/2012/pr12322.htm)
More... (http://www.dr1.com/index.html#1)