Thursday, December 1, 2022

Foro elDinero describes challenging scenarios for the Dominican economy

Internal and international challenges and risks represent a challenging scenario for the Dominican Republic in the context of the extensive wave of inflation, the increase in interest rates, the fiscal deficit, the lag in public investment and the increase in debt.

The focus was part of the content of the II Economic Forum 2022 elDinero, held this Wednesday and which reviewed the current economic and financial status, with an emphasis on public finances, monetary policy and wages.

Issues related, in addition, to the impact of tourism, telecommunications, digital banking, cybersecurity, among others, completed the content of the forum that, as a special act, recognized the career of engineer Luis Molina Achécar, president of Banco BHD.

In the keynote address on the activity, the macroeconomist, Magín J. Díaz, addressed ten challenges that, from his point of view, have a negative impact on the Dominican economy, which, however, looks better off than the rest of Latin America.

The professional, current director of the consulting firm Ecomod, stated that 75% of the world economies present less growth than six months ago, while a path towards the global recession induced by the monetary policy that raises interest rates to control inflation.

This phenomenon -which is not alien to the local economy- occurs at a time when the closest trading partner, Haiti, is suffering a major socio-political crisis that raises its levels of ungovernability, generating more migratory pressures to the Dominican Republic.

Added to the situation are the loss of purchasing power of wages, the financial deterioration of the electricity distribution companies, with demand for more subsidies, the unavailability of natural gas at a good price due to not having renewed contracts and an investment expense of barely 2% of GDP, one of the lowest in recent years.

Díaz noted that the great structural problem of the country is that income is 15% of GDP and expenses 18%, while the tax pressure remains below the average for the region, the fiscal deficit has not subsided (5% of GDP) in the context of an economy that is 52% informal.

Likewise, the economic scenario is aggravated by the persistence of administrative corruption, which affects the business climate, and inequality, which is the most difficult issue: “The poorest have incomes similar to those who live in Congo and the Gaza Strip and the richest like those who live in Switzerland,” he described.

He indicated that the good news is that the country has political and macroeconomic stability, does not register extreme political ideologies and has better macro indicators than the rest of the countries in the region.

In the activity, which included the opening words of the Minister of Economy Pavel Isa, the administrator of the Banco de Reservas, Samuel Pereyra Rojas; Isael Peña, vice president of the Digital Banking area of ​​Banco Popular and Rosanna Ruiz, president of the Multiple Bank Association (ABA).

Likewise, James Pichardo, from the Superintendence of Banks and Francina Jiménez, vice president of Planning and Marketing of the La Nacional Association of Savings and Loans (Alnap).

In addition, the economists Raúl Hernández, Miguel Collado Di Franco, Haivanjoe NG Cortiñas and the president of Grupo Rica, Pedro Brache, as well as Jorge Subero Medina, president of Cap Cana and Nelson Arroyo, president of Indotel.

Also, Jaime Senior, president of the National Association of Young Entrepreneurs (ANJE). The closure corresponded to the Superintendent of Banks, Alejandro Fernández W., who made a presentation on the global vision of Dominican banking and economic recovery.

The elDinero 2022 Economic Forum had the support of Media Consultants in Communication (MCC) and the sponsorship of the brands Martí, Banreservas, Banco Popular, Banco BHD, BitcoinRD, Barrick Pueblo Viejo, Cap Cana, EGEHaina, Superintendency of Banks, INICIA, Ministry of Industry, Commerce and Mipymes (MICM), Grupo Rica and Grupo SID.

Likewise, Induban, Casa Brugal, La Nacional Association of Savings and Loans (Alnap), Cibao Association of Savings and Loans (ACAP), Popular Association of Savings and Loans (APAP), United Capital, Banco Santa Cruz, Indotel, AES Dominicana, Banco Ademi, CEPM, Ministry of Women, Mapfre BHD Seguros, Punta Catalina and Homewood.

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