The spokesperson for the National Council of Private Enterprise acknowledges the strengths of the economy, but warns about informality, low tax revenue, and rigidity in public spending in an adverse global context
SANTO DOMINGO – Amid an international environment marked by geopolitical tensions, rising input costs, and restrictive financial conditions, the Dominican business sector warned on Tuesday about the challenges facing the local economy and called for accelerated reforms to sustain growth.
During a meeting with journalists, the president of the National Council of Private Enterprise (CONEP), Celso Juan Marranzini, stated that the country is not facing supply problems, but rather issues of cost and efficiency, which, in his opinion, are putting pressure on internal competitiveness.
“The challenge lies in how we produce and operate with greater levels of efficiency,” Marranzini explained.
The statement comes weeks after President Luis Abinader announced measures aimed at containing spending, improving state efficiency, and responding to an increasingly uncertain international scenario marked by inflationary pressures and reduced global liquidity.
The brakes on potential
For his part, CONEP's executive vice president, César Dargam, focused on several structural factors that, he said, limit the growth potential.
First, he highlighted the informal employment rate, which stands at 54.2%, although at its lowest level in five years. He also cited the bureaucratic burden, which in Latin America involves up to 1,577 hours annually in paperwork for small and medium-sized enterprises, with costs close to US$4,000 to formalize operations.
In the Dominican case, the simplification of procedures has already generated savings equivalent to 1.3% of the gross domestic product (GDP), according to data cited by the business association.
Dargam referred to the low collection efficiency, especially in the ITBIS, which only captures 37% of its potential, affected by evasion, informality and smuggling, to which must be added the rigidity of public spending.
In practical terms, this means that the State fails to collect almost two out of every three pesos it should collect from ITBIS, according to the cited estimates.
According to data presented by CONEP, 86.7% of the budget is already committed, while debt interest payments absorb 22.3% of GDP, even more than the allocation for education.
For the business sector, this scenario reduces the State's margin to promote public investment, considered key to boosting the economy.
A nuanced diagnosis
Although CONEP insists that the Dominican economy maintains solid foundations, the diagnosis presented reveals accumulated tensions such as sustained growth, but with persistent structural weaknesses.
Among the strengths cited by business leaders are the dynamism of tourism, the performance of free trade zones, and a more diversified energy mix, with renewables accounting for nearly 22% of the total.
However, the business approach itself suggests that these engines coexist with bottlenecks that have not been resolved, such as informality, tax evasion, and slow administrative processes.
Call to accelerate decisions
In this context, CONEP raised the need to expedite permits and authorizations, improve the efficiency of public spending, and strengthen coordination between the public and private sectors, emphasizing the urgency of implementation rather than new measures.
In a less favorable external environment, the point raised by business leaders is not only how much the economy grows, but how much of that growth can be sustained without addressing its structural weaknesses.
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