The economist Antonio Ciriaco Cruz described this Thursday as a “correct measure” the draft modification of Law no. 80-24, which approves the General State Budget for 2025, subjected by the government of President Luis Abinader before the Congress of the Republic.
“The reformulation of the current budget of 2025 is a correct measure and reflects a necessary commitment to capital spending as a countercyclical tool, which is successful in contexts of global uncertainty,” said the dean of the Faculty of Economic and Social Sciences-UASD to journalists of today Digital.
The expert also stressed that prioritizing the public investment In infrastructure, health and safety can boost the economy and generate positive externalities.
However, Ciriaco Cruz said that the increase in deficit, although financed with surpluses, It demands surveillance To avoid structural deviations.
«Likewise, respect for the fiscal rule is key to preserving macroeconomic credibility. Together, it is a healthy measure for the economy and more in a context and economic situation that the Dominican economy needs to increase capital spending to stimulate aggregate demand and boost economic growth, ”said the professor.
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About the project
The modification of the 2025 budget, which was sent to the Legislative Power through the Ministry of Finance and Economy, “raises the application of a countercyclical fiscal policy, aimed at mitigating the effects of the international situation and protecting the dynamism of the national economy, through an increase in capital spending, prioritizing public investment as an engine to boost economic activity and promote sustainable growth.”
“In total, the estimated income for 2025 amount to RD $ 1,277,364.7 million, equivalent to 16.0 % of the gross domestic product (GDP) projected,” a statement was reported.
Similarly, the Government added that, in terms of expenses, there is a net increase of RD $ 69,740.2 million (4.7 % more than initially approved), with an expansion of 20 % in capital spending, equivalent to RD $ 35,548.25 million, that is, 0.4 % of GDP.
“These additional resources will be used mainly to public investment projects that will be in charge of the Ministry of Public Works and Communications, the Ministry of Housing, the Office for Transportation Reorganization (OPRET), the National Institute of Potable and Sewer Water (INAPA), the National Health Service (SNS), the Presidential Commission for Provincial Development and local governments, among other institutions,” he said.
What is expected
The Executive Power stated that, as a result, an increase in the fiscal deficit is projected, which will go from 3.0 % to 3.47 % of the estimated GDP by 2025. “However, this increase will be funded mainly with surpluses of previous budgetary exercises, which ensures that no additional pressures on public debt are generated,” he said.
“This project guarantees compliance with the fiscal rule established in Law 35-24 on Fiscal Responsibility, ensuring that the expansion of spending is carried out in a balanced manner, without compromising sustainability or macroeconomic stability,” he concluded.
