Not much new in proposed budget bill for 2017; no change in deficit of the NFPS

DOMINICAN REPUBLIC - In Brief 03 Oct 2016 by Pavel Isa

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Last week, the Council of Ministers, headed by President Medina approved the proposed budget bill for 2017, which will be presented to Congress in the coming days. The official document of the budget still has not been published (it will at any time) so there is not much information available. However, press release provided by the Presidency indicate that, in aggregate, there would be little new in this budget. The most important elements are: a) it assumes that real GDP will grow between 6.4% and 7.4%; b) the size of the total budget would increase by 7.3% over 2016, for a total of DOP 711.4 bn or USD 15.1 bn; c) revenues are forecast to increase by 13.4% compared to 2016, and that 1.6% will be the result of a strengthening tax and customs administration; d) the deficit target for the Non-Financial Public Sector (NFPS) is DOP 84.9 bn (USD 1.8 bn), equivalent to 2.3% of GDP in 2017. This is similar to that of 2016; e) financial sources will total just over DOP 127 bn (USD 2.7 bn); the government will issue Sovereign Bonds for a total of USD 1.2 bn, and domestic bonds for the equivalent of USD 1.5 bn; f) health, education, security and poverty reduction will be the areas that will receive greater increases. More information and a deeper discussion of the proposed budget will be provided in our next monthly report.