FEB 2009 B&R Dominican Economic Review
JAN09 Monthly Mean Dominican Peso Official Exchange Rate
DOP Fluctuation
USD 35.3693 0.32%
EUR 45.9019 -1.11%
JPY 0.3783 1.23%
JAN09 Monthly Mean Price of Crude Oil (Spot market FOB)
USD Fluctuation
WTI - Cushing, OK 41.71 1.44%
Brent - Europe 39.95 8.74%
JAN09 Monthly Mean Price of Refined Oil Products
DOP Fluctuation
Premium Gasoline 120.03 -2.32%
Regular Gasoline 110.00 -1.82%
Premium Gasoil (0.3%) 106.25 -6.45%
Regular Gasoil 100.65 -5.49%
JAN09 Yearly Growth Inbound Container Volume to Dominican Ports
JAN08 Inflow JAN09 Inflow Growth
15400 12245 -20.49%
Business and Economic News
Government braces for rough start to 2009: DOP 1.32 billion fiscal revenue deficit in January
Finance Minister, Mr Vicente Bengoa, revealed an anaemic 2009 start for government by remarking that fiscal revenue fell DOP 1.32 billion short of the expected collection of DOP 20.45 billion. Mr Bengoa explains this shortfall by pointing out that revenues from the 16% tax on petroleum derivatives disappointed with a collection of DOP 500 million less than expected. Likewise, Dominican Customs Authority bumped with a shortfall of DOP 1.47 billion less than expected, representing a collection of 30% below expectations. In light of JAN09’s verified budgetary bleakness, Mr Bengoa, after underlining February’s tradition of being the weakest month of all in terms of fiscal revenue, warned his colleagues that the Ministry might not be able to disburse all of the funds as stated by the Congress-approved 2009 public budget. He justified the legality of this potential restrictive measure invoking Government Budget Organic Law no. 423-06, whose article 44 permits budgetary appropriations lower than estimated should Government cash inflow falls short of expectations. (Source: Dominican Today)
Fair share of Dominican banks lower their interest rates
Days after the Central Bank lowered the interest rates of its investment certificates, Lombard and overnight loans, some retail and commercial banks started lowering their rates, in some cases as much as six percentage points. Notwithstanding Scotiabank and Banco León were the first to step up and lower their rates, other banks with significantly larger clientele are expected to do the same in the coming days. Whereas Scotiabank notched down personal loan rates from 35% to 29%, León is still to lower its personal loan rate, which remains at 33%. Nevertheless, both Scotiabank and León raked down their mortgages from 24% to 19.5% and from 24% to 22%, respectively. Though Scotiabank lowered its new vehicle loan rates to 21% all the way from 26%, León so far has managed to lower its new automobile acquisition loan rates from 25% to just 24%. In the certificate deposit (CD) segment, whereas León certificates were adjusted from 12.13% to only 11.75%, Scotiabank lowered its interest payments from 14.5% to 12.5%. Banco Popular, Banco BHD and Banco de Reservas (private bank whose equity is wholly owned by the State of Dominican Republic) have so far been the shy participants. Popular and BHD are still to lower the 36% interest they charge on personal loans, and Banco de Reservas is yet to lower it from 34%. BHD, Popular and Reservas’ mortgage rates still remain stiff at 25%, 23.95% and 23%, respectively. (Source: Dominican Today)
Congress studies tax-raising bill proposal to finance public health sector 40% wage raise
Economic measures of debatable wisdom –such as taxing 2% on cheques of all types and 0.25% on all interests accrued by bank deposits—are stipulated in a bill proposal whose objective is to raise wages in the public health sector by 40%. It even contemplates applying taxes on interests generated by Central Bank-issued investment certificates. If the bill gets approved as it is, likewise, casinos and lottery tickets wouldn’t escape additional taxation. Policymakers estimate that this additional fiscal pressure should generate around DOP 2.7 billion in tax collection, amount that would be used to finance the following: 40% wage increase for active physicians and retired ones whose pension do not exceed DOP 30,000 per month; and a 30% increase for dentists, nurses, pharmacists, psychologists and bio-analysts. (Source: Local media outlets)
Record harvests expected from Dominican farms
Agriculture Ministry estimated that cultivated land throughout the country is about to yield in the coming weeks exceptionally abundant harvests of the nation’s ten most consumed agricultural products. The Ministry highlighted the great output expected from, amongst others, beans, pigeon peas, rice, potatoes, onions, cassava, yam, yautia, vegetables, bananas and plantains. 28530.96 metric tons of pigeon peas and 21137.41 metric tons of beans are expected between February and March; nevertheless, from the latter 27,215.54 metric tons are forecasted for the whole year. Plenteousness is likewise expected from onions and potatoes, which are expected to produce around 68038.86 metric tons each. Regarding rice, of which the country has a 2.09 billion metric tons reserve, 310071.08 metric tons are expected to flow into the market from February to March, generating a total rice availability of 2.4 billion metric tons. Forecasting 2009 as the fourth consecutive year of rice self-sufficiency, a total harvest of 498951.61 metric tons is expected for the whole year. Dominican population rice consumption is estimated at 39689.33 metric tons per month. (Source: Dominican Today)
Free zone layoffs reach 60,000 in January, Labour Union claims
Labour union Consejo Nacional de Unidad Sindical declared through its president, Rafael –Pepe—Abreu, that, only in January, free zone firms fired more than 60000 workers and, therefore, asked government to declare a state of economic emergency and to act consequently. Mr Abreu branded these layoffs as scandalous. (Source: Hoy)
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