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The central bank governor, José Lois Malkum, expects the economy to rebound strongly once the effect of the US$616m loan deal with the IMF comes through. He argued that if the agreement with the Fund is implemented, and there are no other internal or foreign surprises, the economy should grow 1% or 2% next year. He claimed that this would represent a success since the Baninter collapse cost between 12% and 14% of GDP.
Malkum added that the IMF deal would enable the government to restructure its US$2bn foreign debt with the Paris Club to reduce payments. The sharp depreciation of the peso (which has all but halved, to RD$35 against the US dollar, in the past nine months) has raised foreign debt commitments to RD$23bn for this year, up from the RD$14bn envisaged in the 2003 budget.
The recovery of the tourism sector is a welcome fillip. The number of visitors to the premier resort of Punta Cana was up 21%, to 786,000, for the first seven months of the year compared with the same period last year.
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