05 July 2006
Central America Enjoying "Robust" Economic Growth, Official Says
International Money Fund report also praises U.S.-Central America trade pact
Washington -- Central America and the Dominican Republic are "benefiting from another year of robust economic performance," says an official with the International Monetary Fund (IMF).
In a June 30 statement, Agustín Carstens, the IMF's deputy managing director, said the region's economic performance has been particularly strong in the Dominican Republic, with low inflation combined with a high rate of growth in the country's gross domestic product.
The IMF had said in a May report about the Dominican Republic that the country's economic program had led to a "remarkable improvement in economic conditions," with Dominican officials continuing to "implement appropriate macroeconomic policies, which have resulted in strong growth, single-digit inflation, a lower public debt ratio, and a rise in international reserves."
Carstens, speaking at the Fifth Annual Regional Conference on Central America, Panama and the Dominican Republic, said regional integration "continues apace," as a U.S. free-trade pact with Central America and the Dominican Republic comes into effect with most of the countries that signed the agreement.
The IMF official said participants at the June 29-30 conference, held in the Dominican city of Punta Cana, confirmed that in some countries the agreement, known as CAFTA-DR, "is already beginning to yield benefits, in terms of improved business climate and increasing foreign direct investment."
The Dominican Republic's Central Bank hosted the Punta Cana conference, which brought together the ministers of finance, central bank governors and financial sector superintendents in the Central American/Dominican region to discuss such issues as capital markets and pension reform. (See related article.)
Despite his optimistic report, Carstens warned that the Central America/Dominican region needs "to remain vigilant since tight oil markets, global imbalances, and pressures in international financial markets pose potentially harmful risks" to national economies. He added that to achieve faster growth and poverty reduction in the region, "successful integration needs to be accompanied by prudent macroeconomic policies and a deepening of structural reforms."
Carstens said the region's senior policy makers at Punta Cana expressed determination to put their pension systems on a “sound footing” and adopt a strategy that will help develop individual countries' capital markets.
Carstens said the IMF will continue to help Central America and the Dominican Republic in their efforts to strengthen macroeconomic policies and consolidate regional integration.
U.S. Commerce Secretary Carlos Gutierrez said June 30 that CAFTA-DR "strips away barriers to trade," and "boosts hope and opportunity" throughout the Central America/Caribbean region.
In his statement congratulating Guatemala for becoming the next country to implement the trade agreement, Gutierrez said that under CAFTA-DR, the United States has offered a "positive vision to the region that advances economic freedom and social reform while strengthening democracies and the rule of law. Such unprecedented U.S. engagement is vital in the effort to counter the voices of those who want to turn the clock back and undo the advancement of democracy and freedom." (See related article.)
The full text of Carstens' statement is available on the IMF Web site.
For more on the trade pact, see Central America Free Trade Agreement-Dominican Republic.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
