Franco Uccelli of Bear Stearns brokerage firm reports that his office has confirmed from official sources that the reasons holding back completion of the Dominican Republic’s first review under its current stand-by arrangement with the IMF are not related to fundamental disagreements over the government’s miscalculation or overvaluation of first-quarter macroeconomic results, as he had originally thought. “Rather, it appears that the delay is the result of differences of opinion between the two sides regarding the revision of a number of fiscal forecasts/targets that will be incorporated into the program, including tax collection and debt service projections. Where there seems to be agreement between the two sides, however, is on the outperformance of the country’s fiscal targets during the first quarter, a clear indication of the Dominican government’s commitment to fiscal rectitude. Neither the IMF nor the government appears to be overly concerned about the delay, and both trust that as soon as consensus is reached on the program’s fiscal issues, the review will be completed (all non-fiscal issues were resolved quickly).”
Uccelli writes in his most recent release that “at the moment, we do not believe that the differences of opinion between the Dominican government and the IMF are serious enough to jeopardize the stand-by program. Having said this, however, we believe that it is essential for the review to be completed as soon as possible to appease market concerns and reduce any unwarranted uncertainties arising from the delay.”