Economist Ivan Rodriguez has told reporters that the level of public debt displayed by the Dominican economy is a major cause for concern, considering the fact that in 2000 the total public debt, both external and internal, was US$3.98 billion and at the close of 2012 it had shot up to US$26.56 billion, “an extraordinary increase of 568%!” He attributed this to the large-scale increase of the country’s internal public debt, which in 2000 was barely US$367.4 million and for 2012 had reached US$13.38 billion, a 3,543% increase.
Rodriguez warns that there are indicators that show that such a debt burden is not sustainable over a long period of time.
He noted that the Dominican Republic’s primary deficit for 2012 was RD$80 billion or 3.45% of GDP. According to the economist, an interesting parameter for determining whether the debt level is sustainable is the relation between the public foreign debt and the exports of goods and services. He said that the threshold for classification as a Highly Indebted Poor Country or HIPC was 150%. For the Dominican Republic the indicator was at 203%, far above the critical value, placing the DR in the HIPC category.
Finally, Rodriguez pointed out that one of the most commonly used indicators was the debt as a percentage of GDP, and this measure was used by the International Monetary Fund (IMF). At 40% of GDP of less the risk of a crisis is less than 5%, but over this number the risk climbs to 15% or 20%. At the present time the Dominican Republic is shown at 46.16% of GDP.
www.listindiario.com.do/economia-y-negocios/2013/4/8/272409/Deuda-publica-RD-cerro-el-2012-en-46-del-PIB