The International Monetary Fund has issued a report where it praises the Dominican monetary authorities for the solid performance of the economy in recent years. It backs the new authorities ambitious fiscal adjustments planned for 2001 to support the envisaged international reserve buildup. The IMF also has praise for the new hydrocarbon law and the increase in the value-added tax, measures that are seen as adequate to secure financing for social expenditures and basic infrastructure while maintaining macroeconomic stability. But at the same time, the IMF urges the adequate expenditure monitoring and control mechanisms to ensure that the budget’s expenditure targets are not surpassed. Authorities are encouraged to conduct a thorough review of public expenditure in order to promote expenditure rationalization, to heighten the quality of social outlays, and to help control overall expenditure. The IMF also notes that publishing full information on how tax revenues are spent is key to improving governance. The IMF wants Congress to approve a new version of the Monetary and Financial Code to give full independence to the Central Bank. The IMF encourages monetary authorities to continue to move toward a more flexible exchange rate policy and welcomed the authorities’ commitment to reduce the foreign exchange commission during 2001. The IMF mentions the need for enhancing competition in the power sector and establishing, as soon as possible, an adequate legal and regulatory framework for this sector of the economy. For details of the report, see http://www.imf.org/external/np/sec/pn/2001/pn0124.htm
