SANTO DOMINGO. - A former central banker paints a dark picture of a “crippled” Dominican economy resulting from external factors and the Governments "excessive spending" in its thrust to get reelected.

Bernardo Vega said the world crisis of rising oil prices and food shortages have local repercussions, as the "economy has been crippled” by a swelled government payroll during the elections period.

He affirmed that the Government is forced to make adjustments before August 16, which could imply new tax reforms and no more subsidies for some products and services.

The economist sees 10 percent inflation for this year, which will jeopardize the population, because price rises have outpaced employees’ salaries in the last two years. The Central Bank reports inflation reached 8.88 percent last year.

However, Vega said the current crisis the authorities face isn’t as bad as that found in 2004, as the result of the bank failures.

Interviewed on Telesistema Channel 11 by Ramon Núñez Ramirez, Bernardo Vega favors a new agreement with the International Monetary Fund, as in his view it would create more confidence for investors.

The economist also favors the granting of concessions for the new, planned works to avoid expenses and a growth of the foreign debt.