Central Bank governor Hector Valdez Albizu has warned that putting a ceiling on the Consolidated Public Sector debt at 40% of GDP is an unrealistic proposal set out in the legislative proposal called Fiscal Responsibility and Transparency, which is being studied in the Chamber of Deputies. His opinions are contained in a letter that he sent to the Chamber of Deputies Public Debt and Financial Assets Committee. Also expressing their opinions yesterday were Joel Tejeda, the deputy manager of Monetary, Exchange Rate and Financial Policies, and Central Bank Monetary Planning director Julio Andujar, who met with the members of the lower house commission. The Central Bank officials brought up the need for the approval of a less rigid Fiscal Responsibility and Transparency Law, with simple rules and of ease of control and without ambiguities. For this reason they proposed that the deputies consider reaching the debt ceiling and other goals established in the proposal, but more gradually.
Valdez Albizu mentioned that the current Consolidated Public Sector debt was 46.6% of GDP, and suggested that the ideal would be to establish a timeline to reach the desired level of debt (40%) or whatever they decide, “…as debt reduction is not obtained through a decree.” He said that he felt that those who wrote up this legal proposal incurred, either consciously or unconsciously, in conceptual and methodological errors that need to be reconsidered according to the reality that the country and the world is experiencing. Albizu expressed his concerns over the proposal to establish a limit to the real increase of the operating expenditures of the Public Financial Sector, including the Central Bank because this measure could violate the autonomy and independence of the institution established by Law 183-02 and the Constitution, which would affect the proper working of the monetary policy.