Over the last 10 years, the need to borrow to fund the National Budget has increased by 150%, which some experts see as a symbol of “poor quality in spending management.” In the recently approved National Budget of the State 2019, which amounts to RD$922 billion, there is some RD $232 billion in financing of which RD$76 billion are for net financing and RD $156 billion are for debt payment, according to a report in Diario Libre. This figure far surpasses the gross financing set aside by the National Budget Law for 2010 which was RD$116 billion of which RD$48 billion were set aside to cover the net financial deficit while just RD $68 billion were used to reduce public debt.
As reported in Diario Libre, a member of the faculty member of the Economics Department at the Autonomous University of Santo Domingo said that the government is undervaluing the deficit in order to show that it is handling the finances in a proper manner, which he says “is not very realistic for 2019.”
The last budget presented by the administration of Leonel Fernandez in 2012 from, amounted to RD$430 billion with a gross deficit of RD$78 billion. Financing that year amounted to RD$22 billion and another RD$78 billion to pay public debt. At that time the net financial deficit fell to 0.9% of GDP that was less than the previous year which was pegged at 1.6% of GDP.
Beginning in 2013 under the Medina administration the budget reached RD$455 billion with a gross financial deficit shooting up to RD$146 billion and net financing of RD$70 billion and pegged at 2.8% of GDP for that year. Debt-taking would continue to increase in the next five years of Medina administration.
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Diario Libre
17 December 2018
