2001News

Red flags point to high government spending

The former director of the National Planning Office, Rafael Camilo said that the government has to revise its income forecast and implement new austerity measures in its spending so that it can have a surplus to make investments while not affecting the macroeconomic stability. He said that during the first two months of the year government budgetary estimates have not been met, with February revenues coming up short by RD$500 million. But, government spending has been increasing, including payroll expenditures. He warned of a forthcoming major fiscal deficit if government discipline is not exercised, as reported in El Caribe newspaper. He says the increasing government current expense levels are leaving little left over for investments and for the implementing of the promised "social relief package." He said the government does not have a policy of organized public expenditure, and that the administration is announcing new public works without having first determined where the funds to build these will come from. This is leading the country to resort to international borrowing when the domestic spending should be financed by internal resources.