SANTO DOMINGO.- The head of the young business leaders grouped in the ANJE on Wednesday said the big jump in public spending led to the gaping fiscal deficit, citing the first quarter as an example, when he affirms government purchases and services climbed 65% higher than the same year ago period.
Manuel Cabral said due to the excessive increase in most budgeted items, “the government had a RD$33.0 billion deficit, when the entire 2012 budget is RD$22.0 billion."
In this regard, the business leader said the decelerating economy contributed to a shortfall in revenues and the size of the gap, of more than RD$8.0 billion, was mostly due to the overestimated tax income in the 2012 Budget.
He said the great challenge the new authorities face is curbing government spending and, in turn, spur economic activity in the context of a weakened world economy.
Cabral, responding to the Central Bank’s "Preliminary Report on the Dominican Economy for the First Quarter of 2012," said the figures reveal the country’s sagging economic activities despite the sharp increase in public spending.
In a statement, ANJE affirms that for a real economic boost the authorities must implement immediate measures to reduce public spending and take actions which boost the productive sector’s confidence
"We need to convert the measures to lower spending through the budget amendment, focusing its decrease in non-priority areas. However, a critical element to restore business confidence is the renegotiation of the Agreement with the International Monetary Fund."