Economist José Rijo Presbot commented when interviewed on El Dia on Channel 11 TV by Huchi Lora and Javier Cabreja that the government has had to make new bond placements to keep up to date with interest payments on public debt. Rijo said that the foreign debt has grown significantly during the Danilo Medina administrations (2012-2017). He said that this year only in interest payments the country would have to pay RD$114 billion. He said the foreign debt of the non-financial public sector had grown 32.7% from September 2012 to 38.8% in June 2017. He said the government had paid RD$39 billion to public sector bondholders, or about 34% of the total debt.
“But what is most serious is that to pay those RD$39 billion, the government had to issue RD$17 billion in local and global bonds,” he said.
He said the RD$114 billion in interest rates for the foreign debt accounts for 22% of the National Budget, not including the financial public sector debt, held by the Central Bank, with CDs issued for around RD$470 billion. He said that usually people only talk about the non-financial public debt, forgetting the Central Bank debt of RD$470 billion or around US$10.2 billion.
Rijo said that at the present pace the foreign debt this year could end at more than 52% of GDP, up from 42.1% in 2012 when Medina became President.
Rijo alerted that the government is trying to give the impression it is cutting expenses in order to justify an increase in taxes. He said the government is trying to reduce the fiscal deficit that is at around RD$9 billion. He observed that if the authorities do not demonstrate they really want to end corruption, an increase in taxation could be difficult to achieve.
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El Nacional/
19 June 2017
