The Central Bank’s debt is now RD$38.75 billion. The public debt of the Dominican Republic is growing at a worrying average rate of RD$702 million per day, according to an analysis by Henri Hebrard. The economist highlights that the commitments of the consolidated public sector (including those of the Central Bank) rose by 7.6% in September 2019, and stand at US$43.7 billion. The foreign debt to GDP ratio increased from 48.1% in September 2018 to 49.8% of GDP in September 2019. “This is practically double the rate of growth of the economy measured in dollars (+4.0%),” he said.
In the case of the Non-Financial Public Sector (SNPF), which excludes the debts of the Central Bank, so far in 2019 a strong increase of US$2.07 billion is observed from December 2018 to September 2019, going from US$32.15 billion to US$34.22 billion.
Hebrard noted that, despite the issuance of sovereign bonds this year, the central government has continued to finance itself in the domestic market, where it issued this year RD$70.06 billion, equivalent to US$1.39 billion, above what had been captured in the local bond market during the same period of the previous year.
“In other words, in nine months, the total budget for 2019 for local issuance of Treasury bonds, which is RD$72.8 billion, has been practically exhausted,” he explained.
Hebrard estimated the government will need another RD$22.6 billion in addition to the RD$22.6 billion requested in the complementary budget to finance what remains of 2019 and cover the deficit.
Hebrard believes that the worrisome upward trend is mainly due to the constant issuance of certificates by the Central Bank, whose year-on-year growth was 10% to 2017, 14.2% to 2018 and 6.8% in 2019.
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El Dia
Diario Libre
19 November 2019