Saturday, April 1, 2023

The five advances of the Dominican economy during 2022, according to the Government

The covid-19 pandemic and the war between Russia and Ukraine, externally, and natural disasters, internally, have been some of the crises that have affected the behavior of the Dominican economy.

For the Minister of Finance, Jochi Vicente, 2022 “was a year in which the Government successfully faced two external shocks and, despite that, was able to maintain sustainability in fiscal accounts.”

During a press conference, which was attended by President Luis Abinader and the Ministers of the Presidency and the Economy, Planning and Development, Joel Santos and Pavel Isa, respectively, the officials highlighted the progress made in fiscal matters during the past year. 2022.

1. Income above budget

According to the head of public finances, the increase in collections over the past year made it possible to respond to natural catastrophes, such as the storm Fiona in September and the trough that hit Greater Santo Domingo last November, which required assistance from emergency by the authorities.

Collections in 2022 closed at RD$955,996.5 million, representing 15.3% of GDP and 9.7% (RD$84,510.6 million) more than the tax revenue registered at the beginning of the year (RD$871,485.9 million).

2. Prudent spending management

“The prudent management of spending was what allowed Fiona to be incorporated and (to respond) to the subsidies without affecting public finances,” Vicente said in this regard, emphasizing the use of this increase in state revenues to respond quickly to those unforeseen.

He stressed that during 2022 the Government invested RD$35,000 million to prevent external shocks “from translating into an excessive increase in the basic basket of the population.” Additionally, the electricity sector had a RD$41,000 million subsidy during that year to curb increases in energy bills.

“Think how many bridges, hospitals and neighborhood roads could be built” with that money, the finance minister said.

3. Reduction of the budget deficit

Similarly, Vicente explained that the budget deficit closed below what was expected in the reformulated budget, from 3.6% to 3.5% at the end of last year. Although in percentage terms the difference is only one tenth, in nominal terms it represented RD$7,279 million less than expected, since a deficit of RD$225,300.16 million was expected, but at the end of the year it was RD$218,020.8 million.

4. Debt is also low

The fourth point detailed by the Minister of Finance during the press conference this Tuesday indicates, as another of the advances registered in 2022 at the macroeconomic level, the reduction of debt as a percentage of gross domestic product (GDP), from being located at 50.4% in 2021 to 45.8% in 2022. This is a difference of 4.7 percentage points.

5. Credit rating improvement

Finally, the Government indicated the improvement of the credit rating by Standard and Poor’s (SP Global), going from BB- to BB, a score that the Dominican Republic had not obtained since 2015.

“How does this translate to the benefit of the population? It means that we are telling the world that this is a country that can receive investment, and we are with open arms. Anyone who wants to invest in this country, set up a business and create employment will have open arms from the Government”, stated Vicente.


Please enter your comment!
Please enter your name here

Latest article