The Presidency sent to Congress a bill that calls for amendments to National Budget Law 366-22 to reassign a surplus had after oil prices declined. The government seeks changes that it says will inject new dynamism to the economy through capital investments and increases in public spending with high social impact. The changes seek to counteract the present slowdown in economic growth that is attributed to a decline in domestic demand and the adverse international economy situation.
“The strategy that we propose aims to safeguard Dominican families’ well-being. At the same time, it takes advantage of the cessation of inflationary pressures to contribute to the return of the productive sectors along growth paths consistent with the prospects for maintaining a favorable macroeconomic climate that is attractive to investment, both domestic and foreign,” states the Presidency.
The reformulation proposes an expansion of capital spending up to RD$193,186.1 million, which represents 2.8% of the Gross Domestic Product (GDP) for projects of high social yield intended to stimulate internal demand. In addition, current spending would be upped to RD$1,115,448.2 million, for a total of RD$1,308,634.3 million in 2023.
Regarding income, the government expects by the end of the year to receive RD$1,086,799.9 million, including RD$1,546.8 million from donations and RD$25,301.7 million from direct income from institutions centralized in the Single Treasury Account (CUT). This amount would represent 15.8% of the expected GDP, 13.6% more than what was collected in 2022 and 4.5% above the National Budget approved allocation to date.
The bill document explains that the expansion in the budget ceilings, necessary for the fiscal boost associated with capital spending, together with the increases in tax revenues, poses a net increase of RD$14,261.7 million in the fiscal deficit, placing it at RD$221,834.3 million, or 3.2% of GDP projected for 2023.
This increase in the deficit will be fully financed by resources available for fiscal year 2022, amounting to RD$23,600 million and by the reduction in financial applications by RD$44,454.9 million, of which RD$ 36,339.9 million correspond to reductions in amortizations, achieved as part of the liability management operation carried out in February 2023.
With this, the financial sources required by the bill would amount to RD$333,064.6 million, a figure that is RD$30,193.2 million less when compared to what was approved in the National Budget Law for 2023. The document states that the borrowing needs required to finance the 2023 budget year are down when compared to the original estimate.
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Hoy
2 August 2023