"Our discussions focused on the dual challenge facing the Dominican Republic in this difficult time: the need to return to a financeable fiscal position in the face of tight world credit markets, while ensuring that macropolicies do not exacerbate an emerging slowdown in economic activity. There was broad agreement on the need to rebalance macroeconomic policies by reducing the fiscal deficit, as proposed by the authorities, to allow some easing of monetary policy and lower interest rates to help spur private sector activity. Over the medium term, improving economic welfare will hinge on accelerated employment creation and income growth that will be enhanced by a further gradual but steady reduction in the public debt ratios.
"In these difficult times, close oversight of the financial sector is most important. On this front, bank indicators are favorable, suggesting a well-capitalized, liquid, and profitable banking system that should be well-positioned to withstand current adverse external conditions. A joint IMF and World Bank mission is scheduled for early 2009 to conduct an update of the financial sector assessment program, which should further aid the superintendency of banks to strengthen its efforts in ensuring the financial sector becomes a major strength of the economy.
