On the subject of fiscal policy, he advocates for further improvements to fiscal policy frameworks—including the introduction of a Fiscal Responsibility Act.
SANTO DOMINGO.-The International Monetary Fund (IMF) projects that the Dominican economy will grow by 4% in 2023 and anticipates that in 2024 growth will return to around the potential level as the global economy recovers.
It also anticipates that the current account deficit will decrease in the medium term, due to lower commodity prices and steady improvements in exports and tourism revenues in light of the global recovery.
At the conclusion of this year's Article IV mission to the country, IMF staff recommended that in the short term, policy priorities should continue to focus on ensuring that inflation returns to the target level, maintaining the downward trajectory of public debt while navigating growth moderation and safeguarding financial stability.
And in the medium term, it urges them to focus on further strengthening policy frameworks, the business climate and social safety nets to bolster inclusive growth.
On the subject of fiscal policy, it advocates for further improvements to fiscal policy frameworks—including the introduction of a Fiscal Responsibility Act, improvements in public financial management, infrastructure governance and tax administration—in parallel with initiatives to sustainably increase revenues by broadening the tax base and reducing exemptions could also support fiscal sustainability.
The IMF mission was led by Emilio Fernández-Corugedo, who visited the Dominican Republic from May 8 to 19 to hold talks within the framework of the Article IV consultation. Regarding financial policy, the IMF indicates that it is necessary to continue advancing the modernization of the regulatory framework and expanding the set of macroprudential tools, and that introducing a prudential regulatory framework for savings and credit cooperatives would also strengthen financial stability.
The IMF representatives also called for structural reforms and strong efforts to improve public institutions, governance, and the business climate—a central aspect of the authorities' reform program—as fundamental to promoting inclusive and resilient growth.
“Authorities must persevere with reforms in the electricity sector while ensuring adequate support for the most vulnerable populations. Climate adaptation and mitigation policies must continue to be adopted within the framework of the Nationally Determined Contributions action plan to reduce vulnerabilities,” the document concludes.
Source: Today's newspaper, with some modifications.
