Jos? Fajgenbaum, the IMF official for the Western Hemisphere Division, told
reporters that the IMF expects to continue conversations with Dominican
officials as they develop options to permit the fulfillment of the economic
program for this year. According to the IMF representative, these definitions
should be ready within a few weeks. Fajgenbaum gave his statement after
concluding the first round of talks with local officials. He pointed out that
the guidelines set out by the IMF were negatively affected by a higher than
expected inflation, a significant increase in oil prices and a new devaluation
of the peso. He recognized that, despite this situation, the authorities had
taken steps that tightened monetary conditions and brought down base money,
leading to a drop in inflation in March and April.
http://www.imf.org/external/np/sec/pr/2004/pr0493.htm
Regarding the IMF?s position, Franco Uccelli of Bear Stearns feels that the IMF
refrained from commenting on any success the government authorities may have had
on the fiscal front. ?This suggests to us that, much like we have been arguing
for some time, while the Dominican Republic?s monetary targets for the first
quarter of this year were probably generally met, a number of key fiscal targets
(including the fiscal deficit target) were probably missed,? said Uccelli. ?The
good news here is that the IMF, aware of the sensitivities of the current
electoral process, is apparently willing to continue the discussions with the
Dominican government during the coming weeks. We believe that this is tacit
recognition from the part of the IMF that Dominican Republic’s deviations from
the program are ?fixable? and ?waivable?, mild enough that an additional period
to further develop and evaluate policy options may lend the government the
opportunity to formulate an effective response to the deviations.?