As soon as it was published, the 2004 budget caused a rumble among economists who questioned the numbers. Economist Eduardo Tejera is doubtful that the budget criteria will be met. The article by Edwin Ruiz in Sunday’s economic section of the Listin Diario says that the government will have to pay four pesos to service debt for every ten it collects. In what the reporter calls a “loose end”, there remain serious misgivings that if the Dominican economy should shrink by 3%, s predicted for 2003, and then grows by a paltry 0.5% in 2004, where will the government find the money to fulfill its payment schedule? Tejera says that the value added tax (ITBIS), currently at 12%, will be increased to 15% or 16% and new taxes on consumer items will be increased. Even then, says the economist, “The money is not enough.” He therefore feels that the 2% tax on imports, the 4.75% exchange commission on foreign currency and the 5% tax on exports will be extended past the six-month period announced last month. Tejera says that this is the “reality.”
Pedro Silverio, the lead economist at the PUCMM economic think tank Cenantillas, says, “There will be serious problems with financing the 2004 budget.” He adds that given that the debt service is “sacred” and the mention of downsizing public payrolls is “taboo”, any adjustments will have to come from investments to projects and social programs.