Dominican Republic - Current economic memorandum

FILE Report No. 2492-DO Current Economic Memorandum on the Dominican Republic April 30, 1979 Latin America and the Caribbean Region Country Programs Department I FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disciosed without World Bank authorization.  Exchange Rate Official Rate: Dominican Peso RD$1.00 = US$1.00 Parallel Market Rate: Fluctuating daily, but usually within a band of RD$1.15-1.25 = US$1.00 Fiscal Year January 1 - December 31 Abbreviations AID = Agency for International Development CDE = Corporacion Dominicana de Electricidad (Dominican Electricity Corporation) CEDOPEX = Centro de Promocion de Exportaciones (Export Promotion Center) CFI Corporation for Industrial Development EPZ = Export Processing Zone FIDE = Investment Fund for Economic Development GDP = Gross Domestic Product GNP = Gross National Product IAD = Instituto Agrario Dominicano (Dominican Agrarian Institute) IDB = Inter-American Development Bank IBRD = World Bank INESPRE = Instituto Nacional de Estabilizacion de Precios (National Price Stabilization Institute) ISA International Sugar Agreement ONAPLAN = National Planning Bureau  FOR OFFICIAL USE ONLY TABLE OF CONTENTS Page No. Data sheet Map Summary and Conclusions ......................................... i - vi I. Introduction ........................................... 1 II. Recent Economic Developments, Sectoral Issues and Strategy ............................................... I Output and Expenditure ................................. 1 Sectoral Performance and Policy ........................ 3 Agriculture ........................................ 3 Manufacturing ...................................... 6 III. The Stabilization of the Economy ....................... 9 The Balance of Payments - Prospects and Policies ....... 9 Monetary Policy ........................................ 12 Fiscal Policy .......................................... 12 IV. Public Finances and the Public Investment Program ...... 13 Statistical Appendix Project List This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  I  Page 1 of 2 ECONOMIC INDICATORS GROSS NATIONAL PRODUCT INI 1977 ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. % 1960-68 1968-74 1974-77 GNP at Market Prices 4,343.2 100.0 3.6 10.5 5.3 Gross Domestic Investment 1,008.5 23.2 8.7 21.6 5.4 Gross National Saving 744.2 17.1 -9.1 30.7 16.5 Current Account Balance - 264.3 -6.1 Exports of Goods, NFS 917.9 21.1 -1.2 14.3 7.5 Imports of Goods, NFS -1,202.6 -27.7 9.9 12.5 2.3 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1977 Value Added Labor Force V.A. Per Worker US$ Mln. % Mln. % us$ u Agriculture 931.2 20.9 Industry 1,305.0 29.2 Services 2,230.4 49.9 Unallocated Total/Average 14006.6 loo.0 GOVERNMENT FINANCE General Government Central Government (RD$ Mln.) % of GDP (RD$Mln.) % of GDP 1977 1977 1976-77 1977 1977 1976-77 Current Receipts 677.6 15.2 15.7 629.3 14.1 14.4 Current Expenditure 441.7 9.9 9.9 382.6 8.6 8.6 Current Surplus 235.9 5.3 5.8 246.7 5.5 5.8 Capital Expenditures 241.0 5.4 5.7 236.1 5.3 5.5 External Assistance (net) 17.2 o.4 o.4 19.1 o.4 o.4 MONEY, CREDIT AND PRICES 1970 1971 1972 1973 1974 1975 1976 1977 (Million RD$ outstanding end periodT Money and Quasi Money 295.7 343.3 418.8 518.3 739.2 867.0 887.3 1,020.4 Bank Credit to Public Sector 233.2 273.4 298.3 330.5 421.9 424.9 401.4 475.8 Bank Credit to Private Sector 180.1 216.8 282.1 385.6 577.8 685.0 788.9 851.4 (Percentages or Index Numbers) Money and Quasi Money as % of GDP 19.9 20.6 21.1 22.1 25.3 24.1 22.5 22.8 General Price Index (1970 = 100) 1/ 100.0 101.4 107.7 114.2 134.3 157.3 161.5 175.6 Annual percentage changes in: General Price Index 1/ . 1.4 6.2 6.o 17.6 17.1 2.7 8.7 Bank Credit to Public sector 7.7 17.2 9.1 10.8 27.7 0.7 -5.5 18.5 Bank Credit to Private Sector 18.7 20.4 30.1 36.7 49.8 18.6 15.2 7.9 NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ GDP deflator. not available not appl-icable  Page 2 of 2 TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS 1975 1976 1977 Average 1975-77 (Millions US $) US$ Million % Exports of Goods, NFS 1,009.1 840.4 917.9 Sugar and by-products 376.o 47.2 Imports of Goods, NFS -1.083.2 -1,089.4 -1,202.6 Ferronickel 101.4 12.7 Resource Gap (deficit = -) - 74.1 -249.0 -284.7 Coffee 109.5 13.7 Tobacco 34.3 4.3 Interest payments, net - 28.3 - 43.5 -51.1 Cocoa 54.2 6.8 Other factor payments, neti/ - 84.5 - 80.3 -72.3 Bauxite 18.1 2.3 Net transfers 2/ 104.4 130.9 1143.8 All other commodities 103.3 13.0 Balance on Current Account - 82.5 -241.9 - Total 796.9 100.0 Direct Foreign Investment 63.9 60.0 45.9 EXTERNAL DEBT, DECEMBER 31, 1977- Net Public MLT Borrowing 45.7 46.2 84.5 Disbursements (93.0) (65.6) (106.9) US $ Mln Amortization (47.3) (19.4) ( 22.4) Short Term Capital 25.7 16.8 -27.1 Public Debt, incl. guaranteed 606.5 Other items n.e.i.3/ 12.2 88.7 220.9 Non-Guaranteed Private Debt n.a. Increase in Reserves (+) 65.0 _30.2 59.9 Total outstanding Disbursed Gross Reserves (end year) 135.8 165.2 224.6 DEBT SERVICE RATIO for 1977 4/ Net Reserves 31.5 -11.2 61.5 Fuel and Related Materials Public Debt, incl. guaranteed 7.0 Imports 179.0 166.2 176.8 Non-Guaranteed Private Debt n.a. Exports - - - Total outstanding Disbursed 7.0 RATE OF EXCHANGE IBRD/IDA LENDING,(JULY 31, 1978) (Million US$): Through - 1971 Since - 1971 US $ 1.00 = RD $ 1.00 US $ 1.00 = RDOutstanding Disbursed 25.1 11.9 RD $ 1.00 = US $ 1.00 RD $ 1.00 = US $ 1.00 Undisbursed 28.0 10.2 Outstanding incl. Undisbursed 53.1 22.1 1/ Workers remittances included under net transfers. 2/ Includes balancing item for adjustments of imports. 3/ Includes private long-term capital, other capital, and errors and omissions. 4/ Ratio of debt service to exports of goods and non-factor services. not available Country Programs I Latin America and the Caribbean Regional Office  IBRD--1271 ]R 71~~~~ 3 A' 70-'30- io- W~~~~~~~~~~~~~10 3R0S' UNITED_SAE ~ ~ LNOVEMBER 1977 MO ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~)~~~~~~~~~Bbhor_d A TLANTIC UERTO PLATA ~~~~~~~~~~~~~~~~~~~~~~~~~~~OCEAN DOMINICAN MEl CO l40407C 1~-Z-T REPUBLIC C-nrbSn-r S.p EL -AA4CRV0- 440 NN71 ~ ~~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~PCFCOEN r4U