{"id":7519,"date":"2022-05-27T16:26:59","date_gmt":"2022-05-27T16:26:59","guid":{"rendered":"https:\/\/dmklawyers.com\/?p=7519"},"modified":"2022-05-27T20:32:57","modified_gmt":"2022-05-27T20:32:57","slug":"imf-staffs-completes-2022-article-iv-mission-to-the-dominican-republic","status":"publish","type":"post","link":"https:\/\/dmklawyers.com\/en\/imf-staffs-completes-2022-article-iv-mission-to-the-dominican-republic\/","title":{"rendered":"IMF Staffs Completes 2022 Article IV Mission to the Dominican Republic"},"content":{"rendered":"\n
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF\u2019s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.<\/p>\n\n\n\n
An International Monetary Fund (IMF) team led by Mr. Esteban Vesperoni visited the Dominican Republic from April 29 to May 13 to hold the 2022 Article IV Consultation discussions.<\/p>\n\n\n\n
At the conclusion of the mission, Mr. Vesperoni issued the following statement:<\/p>\n\n\n\n
\u201cThe Dominican Republic\u2019s dynamic economy continued to show remarkable resilience to global shocks. This was supported by sound policies, monetary policy support, a nimble COVID vaccination campaign and a well-attuned reopening that allowed the economy to make the most of the global rebound last year. This resilience and strong signals of policy sustainability are placing the Dominican economy in a good position to face emerging global challenges going forward.<\/p>\n\n\n\n
\u201cThe economy recovered strongly from the pandemic, despite global factors that created challenges in terms of inflation. Real GDP increased by 12.3 percent in 2021, amid broad sectoral growth\u2014including a notable recovery in construction and tourism, with arrivals exceeding 2019 levels since last fall. By end-2021, output was 5 percent above pre-pandemic levels, pointing to a recovery beyond a statistical rebound and consistent with strong employment growth. Inflation convergence is taking longer than envisaged. At about 9 percent last March, it continued to exceed the target range due primarily to high inflation in the United States, higher global energy and food prices, and supply chain disruptions. The external position was robust, with the current account financed by FDI and a significant accumulation of reserves. The financial system remains resilient and continues to support the economy despite the unwinding of pandemic-related regulatory flexibility.<\/p>\n\n\n\n
\u201cThe outlook points to a continued recovery, though global developments pose risks. GDP growth would converge to 5 percent\u2014around its potential\u2014and inflation would return to the target range by next year as the impact of global shocks recedes, in the context of financial stability and a sound external position. As for risks, the war in Ukraine may have a stronger-than-expected effect on global growth and inflation. The pandemic, while well-contained in the Dominican Republic, may downgrade growth in other regions. And monetary policy tightening in the United States may have a stronger-than-expected impact on capital flows. These shocks are creating fiscal and monetary policy challenges. The authorities have appropriately responded with temporary measures while maintaining budget discipline through expenditure control and executing proactive debt-management that reduced financing risks. The central bank has begun a warranted normalization of monetary policy, absorbing liquidity and increasing the monetary policy rate.<\/p>\n\n\n\n
\u201cIn the short term, policy priorities should aim at securing the return of inflation to the target range and keeping the downward trajectory in public debt, while supporting the vulnerable population from the impact of global shocks. The pace of the ongoing monetary policy tightening cycle should be data dependent, keeping inflation expectations well-anchored and safeguarding the hard-won credibility of the inflation targeting regime. The response of fiscal policy to the impact of global shocks on inflation should continue to be based on temporary budgeted measures while improving their targeting where feasible. An inclusive fiscal consolidation can secure the current downward path in public debt.<\/p>\n\n\n\n
\u201cThe team welcomes reforms in the electricity sector, which can ensure reliable provision of electricity, reduce fiscal transfers to the sector and enhance the quality of public spending. The electricity sector has been a burden to public finances in the past and the Electricity Sector Pact has given the authorities a mandate to enhance governance in the sector, create conditions to foster investment, and implement reforms in the tariff and subsidy system, which can achieve sustainability in the sector.<\/p>\n\n\n\n
\u201cWe also commend the authorities for the reforms to improve policy frameworks that aim at fostering their vision of a more effective public administration. The authorities are fully committed to implement a fiscal responsibility law. In pursuing this objective, they are assessing plans to strengthen public financial management and the medium-term fiscal framework while working on increasing transparency and governance, including in public procurement. The authorities continue to align the banking regulatory and supervision framework to international standards.<\/p>\n\n\n\n
\u201cOver the medium term, well-sequenced reforms\u2014some of which are ongoing\u2014would foster inclusive growth:<\/p>\n\n\n\n
The mission met with President Luis Abinader, Central Bank Governor H\u00e9ctor Valdez Albizu, Minister of Finance Jos\u00e9 Manuel Vicente Dubocq, other senior officials, and representatives of the civil society and the private sector. The team would like to thank the authorities for exceptional hospitality and open and productive discussions.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the…<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[149],"tags":[],"class_list":["post-7519","post","type-post","status-publish","format-standard","hentry","category-investment-in-dr"],"acf":[],"yoast_head":"\n