They consider fiscal discipline of the government, they should be enough for the level of indebtedness to go downward
The Bank of America’s global research unit believes that the macroeconomic trajectory of the Dominican Republic is the most promising in Latin America for the coming years, and estimates that it will be the second country with the highest economic growth in the region with 11.5% by 2021.
In an Emerging Insight report, dated November 29 of this year, the bank values the country’s robust economic recovery, better-than-expected fiscal results, political stability and progress in the structural reforms promoted by President Luis Abinader.
Bank of America notes that power sector reform is not a trivial achievement.
“It has already begun to be phased in, and will likely have a long-term positive effect on public finances and productivity growth,” the document states.
They consider that the government’s fiscal discipline, together with the benefits of the electricity reform, should be sufficient for the country’s level of indebtedness to enter a “modestly downward path in the medium term.” Bank of America estimates that the debt ratio will drop to 50.4% of gross domestic product (GDP) next year and to 49.4% of GDP by the end of 2023.
The bank’s vision suggests that the policies implemented will be sufficient to deter downgrading risk rating agencies.
On the other hand, Bank of America indicates that since last year’s deficit of 7.6% of GDP, the fiscal balance has improved substantially in 2021, driven by double-digit revenue growth in the first ten months of the year.
“” We forecast a fiscal deficit of 2% of GDP for 2021 “.
