Dominican Republic Should Cut Debt to Boost Economy, IMF Says

The Dominican Republic should lower public debt to 35 percent of gross domestic product from 44 percent forecast for this year, the International Monetary Fund said.

Economic performance and policy implementation have deteriorated in the past two years in the Caribbean nation, the IMF said in a statement today. The economy will probably grow less than 4 percent this year after expanding 7.8 percent in 2010 and 4.5 percent last year, according to the statement, which followed a Nov. 5-16 visit to the country by IMF staff.

Dominican banks are “well capitalized” and recent changes to boost tax revenue are a positive development, the fund said.

“Macroeconomic policies should be geared towards reducing fiscal and external vulnerabilities,” the IMF said. That would require a stronger fiscal position and “a tighter monetary stance that is consistent with strengthening the international reserves position.”

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