Dominican Republic’s Central Bank says IMF is off
Yesterday, Monday 11 March, Central Bank governor Hector Valdez Albizu revealed that the first two months of the year have been positive for the economy, with inflation at 1.26% in January and 0.33% in February, and just 1.46% over two months, and the Gross Domestic Product (GDP) was up over 4.6% in January, while during the same period of 2012, the accumulated growth was just 2.46%. Valdez Albizu said that no additional tax adjustment such as suggested by the International Monetary Fund (IMF) is necessary.
Regarding the proposal by the IMF that the Dominican economy needs an additional tax adjustment, Valdez Albizu said: “Ah, the Fund proposes and God disposes and it is the President of the Republic who is in command, and he has given his word to the people that we will not introduce any modification to the tax structure.”
Besides that, the tough tax adjustment has already been made, he said, referring to the IMF report that points out that the consolidated fiscal deficit is at 8.5%, and he said that the deficit of the non-financial public sector, not including the Central Bank, had been 6.8% in which 6.6% was for the central government and 2% for other institutions in the non-financial public sector, and is the 1.1% of the quasi-fiscal deficit of the Central Bank is added, then the consolidated fiscal deficit of the country is 7.9% and not 8.5% as the IMF said.
The IMF said, as they issued their statement, that their numbers were an estimate, because the year had not ended, since they left the country in the second week in November 2012. He added that the IMF adds 1.1% for the Central Bank and 7.4% for the non-financial public sector in order to arrive at their 8.5%. Valdez Albizu said that there is no conditionality agreement with the IMF and that any decision would be up to the President.