SANTO DOMINGO.-  The International Monetary Fund announced Monday that its board of directors had approved a US$1.7 billion loan to the Dominican Republic to assist the government's efforts aimed at maintaining the Caribbean country’s economy toward sustainable growth.

The IMF said the Government has renewed efforts to establish a stable macroeconomic environment in the nation by applying short-term countercyclical policies, while establishing conditions for robust, sustainable growth. “Successful implementation of this program will unlock significant financing from other multilateral sources, creating space for an adequate fiscal response.”

"Following several years of rapid growth, the Dominican economy has weakened significantly due to the global economic recession," said IMF Deputy Managing Director & Acting Chair Murilo Portugal. "The financial system has weathered the recent global crisis relatively well, as a result of reforms undertaken after the 2003 financial crisis. The lack of adequate financing however, constrained the conduct of countercyclical fiscal policy."

Among the proposed reforms is to address deficiencies in revenue management, tackling structural issues in the electricity sector, and strengthening social safety nets.