The economic recovery achieved by the Dominican Republic Front of health crisis generated by the coronavirus has been valued as a success story by the international community, highlighting the opinions of the most prestigious risk rating agencies, the most representative institutions of the Bank international and various multilateral organizations.
According to a press release sent to Free Journal for him central bankIn general terms, all these entities have favorably weighed the implementation of macroeconomic policies consistent with the objectives of achieving the recovery of activities productive, to recover jobs and to protect the most vulnerable segments of the population.
The central bank highlights that during the year just ended it launched a monetary politics expansionary that included the reduction of the reference interest rate from 4.5% to 3.0% and the implementation of various liquidity mechanisms, aimed at creating the conditions for financial institutions to place and / or refinance low-cost loans to companies and to Dominican homes.
“At the same time, the government designed social programs to protect the most defenseless groups of the population and made the tax burden on companies more flexible, particularly those sectors most affected by the pandemic, preserving jobs and protecting people’s income ”, emphasizes the entity.
The document allows us to see the unification of criteria in this “international vision” in organizations as different as the Bank private sector, risk rating companies, international tourism organizations and multilateral entities such as the International Monetary Fund (IMF), the world Bank (BM) and the United Nations.
They explain that, in December 2021, two highly prestigious international risk rating agencies, Standard and Poor’s and Fitch, released their assessments of the future performance of the Dominican economy, which have resulted in an improvement in the prospects for negative to stable.
“It should be noted that, throughout 2021, only one country achieved a favorable review of the two major rating agencies in all of Latin America and it was precisely the DR, an unequivocal sign of the positioning that the nation has achieved as one of the most important economic leaders. region of. Even in the case of economies such as Mexico, Panama, Costa Rica and El Salvador, the outlook was defined by the rating agencies as negative ”, details the note of the central bank.
They affirm that Standard and Poor’s (S&P) described the Dominican recovery as impressive, highlighting the effectiveness in reversing the negative effects caused by COVID-19 and the strengthening of international reserves, the main buffer that is available in the face of adverse conditions in the international markets. For 2022, S&P projects a growth of 6%, a rate above the potential of the Dominican economy.
Fitch expects nonfinancial public debt to stand at 49% of GDP in 2022-2023, well below the average of 57% of GDP for other BB- rated economies. For Fitch, the economy would grow 5.7% in 2022, also above potential, converging to 5.3% in 2023.
The risk rating agency Moody’s maintains a stable outlook for RD, with which the three most important rating agencies agree on their valuation.
It should be noted that the strengthening of international reserves, highlighted by the rating firms, has been possible due to a better than expected behavior in the activities Related to the external sector Remittances, for example, will exceed US $ 10 billion this year, while foreign direct investment will most likely exceed US $ 3 billion, covering 1.7 times the projected current account deficit.
Vision of the Bank investment and international organizations
Like the risk rating agencies, other entities of great importance in the global economy have presented positive evaluations of the Dominican economy. In this sense, the Bank of America financial corporation (BofA) projects a growth of 11.5% for the Dominican economy in 2022, while it expects that in 2023 the country will continue to grow above its potential.
BofA defines DR as “the economy with the best macro outlook in Latin America for the next few years” and recommends its investors to maintain their positions in public debt bonds, highlighting among its considerations the good management of liabilities that the government has made Dominican.
Beyond its vision of economic growth, Bank of America also highlights the higher tax revenues resulting from the economic recovery and the greater efficiency in collections, political stability and the implementation of pro-market policies, as well as progress in structural reforms. He mentions, among other reforms, the relevance of the electricity reform –
Likewise, the Secretary General of the World Tourism Organization (UNWTO), Zurab Pololikashvili, recently referred to the Dominican nation as the best country to invest in the tourism sector, highlighting the role of the Bank multiple by financially supporting tourist developments in Dominican territory. It should be remembered that the UNWTO is the agency of United Nations responsible for promoting a responsible, sustainable and accessible globally.
In the case of IMF, the most important multilateral organization in terms of the analysis of the economies of countries worldwide, it can be seen in its Regional Economic Outlook report, published in October 2021, that the DR would grow 9.5% in 2021, well above the average of Central America.