The IMF mission that visited the country in the first two weeks of September reported that economy was in decent shape.
In a final communiqué, the IMF mission noted that although the economy was slowing down, GDP growth in 2011 would still be between 4% and 5%, despite the less favourable international economic outlook. Previously, the fund had been forecasting GDP growth of between 5% and 5.5%.
The fund’s main concern is the pick-up in inflation. The annual rate hit 10% in August, but the central bank is holding firm and not raising interest rates. The IMF seems to accept the central bank’s arguments that over the final part of this year inflation will fall back to an annual rate of between 7% and 8%. The bank expects the 2012 rate to be between 5% and 6%.
The two main economic targets the government missed reducing are the costs of the electricity system and reducing the fiscal deficit to 3% of GDP.
Venezuelan oil: On 20 September Venezuela announced that it was increasing its daily shipments of oil to the Dominican Republic from 30,000 barrels to 50,000. The oil is supplied on easy terms under the Petrocaribe programme. Under Petrocaribe, all countries are entitled to 50,000bpd, but hitherto the Dominican Republic had been receiving only 30,000bpd. In return, the DR supplies Venezuela with edible oils and chicken.
Tourism: In the first eight months of 2011 the country hosted 3.3m tourists up 2.9% (or 94,403) on the same period of 2010. The number of European arrivals fell, but this was more than compensated for by a 76,049 increase in the number of tourists from South America. There was also a noticeable (25,296) increase in the number of Russian tourists coming to the DR.
- Monthly inflation in August was 0.5%, down from 0.8% in July. The annual rate, however, was 10.2%.
