Dominican Republic

Dominican Republic unveils stimulus plan aimed at job creation, social impact

Bnamericas Published: Tuesday, May 07, 2013
The Dominican Republic will spend 9bn pesos (US$219mn) to stimulate the economy with a special focus on job creation and social impact, the government said in a statement. Of the total, 3bn pesos will go to the public works ministry, 2bn pesos to provide financing for SMEs, 1.5bn pesos to finance 50 primary health centers and 800mn pesos to the construction and repair of low income housing units, according to the statement. State-owned agriculture lender Banco Agrícola will also receive part of the resources to support farmers, the government said. The expansion of the country's economy has slowed down significantly in recent years with growth falling from 7.8% in 2010 to 4.5% and 4% respectively in 2011 and 2012. Prospects for the coming years do not look much better as the IMF forecasts growth of only 2.2% in 2013 and 3.4% in 2014. The Dominican Republic is also facing problems on other fronts, like a growing deficit and public sector debt. Last month saw the struggling Caribbean nation return to the international financial markets with a 10-year issue of US$1bn in sovereign bonds with a yield of 5.875%. This sale benefitted from the current strong demand among investors for high yield bonds from emerging markets and the issue was six times oversubscribed - and raised US$250mn more than the country's previous sovereign bond issue in 2011.

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