US$30.0B debt stalks Dominican Republic’s economy
Santo Domingo.- Runaway public debt already near US$30.0 billion, unemployment and a distorted production model that spooks investments are the Dominican economy’s main pitfalls, according to economists Miguel Ceara and Ernesto Selman.
But of the three woes the external debt is what most concerns experts, and with reason: 91% of the interests due in2014 are being paid with new loans.
“We’re not only paying capital with debt, but also the interests,” Ceara said. “That’s money which is literally bouncing because it is not used for any productive activity, and to pay off interest instead.”
“There’s a doubt as to whether the money borrowed in the past was used effectively, because in a country with so many institutional weaknesses, it is legitimate to think that the money has been misused,” Ceara said
Speaking in the Corripio Media Group luncheon, Ceará added that according to budget figures, this year’s net new debt is RD$77.0 billion, and RD$71.0 billion has to be paid in interest.
Category: DR News |