Students and professors of the schools of Economy of the INTEC, UASD and PUCMM universities met on Monday, 23 April 2019 to discuss the economy. They observed advances are needed for changes in government spending, tax collection, the Labor Code, the pension fund system, the Central Bank Capitalization Law, and the signing of the Electricity Pact between private sector and government. They expect GDP growth to stay high, albeit at lesser levels than in the past two years.
The schools of economy also concurred that the openness of the Dominican economy makes it vulnerable to economic shocks, including the rising price of fuel and raw materials and the impact of the US economy, the Dominican Republic’s leading trade partner.
Economist Antonio Ciriaco Cruz for the UASD said the Dominican economy is on a trend towards a moderate slowdown in growth that is more compatible with available resources after a year of whirlwind growth.
Rafael Espinal of INTEC says the Dominican economy is characterized by high growth, controlled inflation and a diversity of sectors that stimulate growth, making it less vulnerable to adverse international cycles. He described this as an active resilience to negative cycles. Nevertheless, he said that the country is very vulnerable to external shocks because of its low levels of savings, which make it dependent on remittances, foreign investment, manufacturing free zone exports and tourism, as well as on imports of fuel and food. He observed there has been a lack of political capacity to carry out the fiscal reforms, given the high burden the paying of interest rates has on the public debt, and the effects on the exchange rate.
Martin Franco Rodríguez for the PUCMM urged the start of discussions for the Fiscal Pact, for a more fair distribution of tax revenues and government spending. He also spoke of the importance of reforms to the Labor Code and the Electricity Pact, mentioning that just as important is the implementation of the pacts.
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El Caribe
24 April 2019