External Dynamics: A Gloomy Outlook

July 2008 | Economic Analysis

The outlook on the Dominican Republic's sovereign credit rating remains negative, as the economy's external liquidity position appears to be evaporating. While government measures to rein in an anticipated fiscal shortfall will be welcomed by the country's creditors, we believe that there is little that can be done to prevent public finances from slipping into red this year. The current account, too, is pushing deeper into deficit and uncertainty is mounting amid a slowing US economy and greater financial market volatility. We currently do not rule out a ratings downgrade for the Dominican Republic over the coming 12 months.

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