2011年-IMF国际货币组织全球_Dominican_Republic_Fourth_Review_Under_the_Stand_81页_1mb

Dominican Republic: Fourth Review Under the Stand-By Arrangement and Request for Waiver of Nonobservance of Performance Criterion

Core Content

This document outlines the Fourth Review Under the Stand-By Arrangement (SBA) for the Dominican Republic, conducted by the International Monetary Fund (IMF) staff and approved by the Executive Board. The review was completed on December 3, 2010, following discussions that ended on November 9, 2010. The review was part of a 28-month SBA approved in November 2009, with an initial amount of SDR 1,094.5 million (500% of quota).

The main objective of the program is to limit procyclical policies in the short run and strengthen debt sustainability and growth prospects in the medium term through fiscal consolidation and structural reforms. The program includes two phases: a supportive phase (mid-2010) and a tightening phase (second half of 2010 through early 2012).

Key Developments

• Economic Growth: The economy expanded by $7½% year-on-year (yoy) in the 12 months to September 2010, continuing a fourth consecutive quarter of strong growth. The output gap is narrowing rapidly.
• Inflation: Headline inflation reached $6¼% yoy in October 2010, within the BCRD target of 6–7%. Core inflation stood at $4¼% yoy, reflecting spillovers from higher food and fuel prices and slack capacity.
• Fiscal Position: The central government deficit was $1.7% of GDP, 0.3% below the target. The consolidated public deficit was $3.0% of GDP, slightly below the target of $3.2%. The first supplementary budget was submitted in June and approved in September 2010 to align fiscal spending with the program.
• Monetary Policy: The Central Bank (BCRD) started removing monetary policy accommodation, increasing the policy rate by 100 basis points in two months (September and October 2010) to 5%.
• External Sector: The external current account deficit widened to $7½% of GDP in 2010, driven by seasonal non-oil imports and a high hydrocarbon bill. However, exports and tourism receipts grew significantly. The nominal exchange rate remained stable, with a $2½% depreciation against the dollar and a $7½% appreciation against the euro.

Reviews and Performance Criteria

• The program remains on track, with all performance criteria and benchmarks for end-September 2010 met except for the zero arrears to electricity generators.
• The waiver for the nonobservance of the arrears performance criterion was already granted in the previous review.
• A data revision for December 2009 led to a small breach in the consolidated public deficit. The authorities requested a waiver for the balance of the public administration.
• The performance criterion on arrears to electricity generators was missed by $91 million, but these arrears were cleared by the first week of October 2010.

Staff Appraisal

The IMF staff supports the waiver request and the completion of the fourth SBA review, citing positive macroeconomic results and satisfactory performance. The program is on track, and the authorities are committed to its objectives.

Main Policies

• The first part of the program (fiscal accommodation) was successfully implemented, leading to economic recovery.
• The second part (fiscal consolidation) is now being implemented, with the authorities focusing on reducing electricity subsidies and increasing tax revenues.
• The Central Bank has begun tightening monetary policy, and supplementary budgets were submitted in 2010 and 2011 to align with the program.
• The government has strengthened social safety nets, and public sector salaries have increased, easing social tensions.

Structural Reforms and Institutional Strengthening

• The two structural benchmarks for end-September 2010 were observed.
• The authorities presented a plan to develop domestic public debt markets and debt management.
• The Ministry of Finance has gained considerable credibility in financial markets due to coordinating debt management with the Central Bank.
• The Central Bank has taken steps to remove impediments to foreign and local investor participation to foster liquidity.

Regional and Political Context

• The Haitian economy's recovery has increased demand for Dominican goods, particularly cement, light consumer goods, clothing, and processed foods.
• The cholera outbreak in Haiti has temporarily disrupted border trade and led to social unrest.
• The Dominican Liberation Party (PLD) won an overwhelming majority in the May 2010 elections, giving President Fernández a vote of confidence in his economic program.
• The new Constitution prevents a former President from being elected for two consecutive terms unless a referendum is held.

Summary of Key Indicators

Conclusion

The Dominican Republic has made significant progress in macroeconomic management, fiscal consolidation, and structural reforms. Despite challenges in revenue collection and subsidy reduction, the program remains on track. The IMF staff supports the waiver request and the completion of the fourth SBA review, recognizing the positive economic developments and satisfactory performance. The next political cycle is expected to begin in the second half of 2011, and the authorities are preparing for it.