The Central Bank reports that preliminary data on the outcome of the second half of 2005 shows that economic growth for that period could have reached 12%, making for a 9% growth throughout the year. The IMF’s revised Gross Domestic Product forecasts had set the year’s growth at 4.5%, and the Central Bank authorities had expected the year to end at 7%. This high growth rate, the highest in Latin America, comes after four years of no growth or stagnated growth under the last administration.
Preliminary estimates indicate that inflation for the year would be around 8%, despite the skyrocketing price of petroleum imports. This is significantly below the 2004 figure, which was 28.74%.
In a paid advertisement, the Central Bank also highlights other indicators of economic recovery. In addition to growth, other achievements being stressed by the present governmental economic team are exchange rate stabilization, the increase in international net reserves to RD$1.42 billion, and regularizing of payments with foreign debtors. The Central Bank stresses that other economic achievements are the renegotiation of the internal foreign debt (both with the Paris Club nations as well as with private banking), the signing and maintenance of an agreement with the International Monetary Fund, after two aborted agreements with the previous government, and the fulfillment of the quantitative and qualitative objectives set out in that agreement.
The government is also proud of having a surplus of RD$12.24 billion as of November 2005. The funds reportedly were used to cover past debts. Tax collections were up 27.22% as of November, while spending had only increased by 13.86%.
Another area the government cites as an indication of economic recovery is the portfolio of loans in pesos that increased to RD$113.5 billion, up from RD$98 billion in December 2004. The Central Bank explains this is the result of the more than 10 percentage point reduction in the lending rate, that declined from 32.65% average in 2004 to an average 21.54% in 2005.