Macroeconomic Forecast DOMINICAN REPUBLIC

Real GDP in the Dominican Republic grew by 4.0% y-o-y in the first half of 2011, a deterioration compared to the 7.5% y-o-y increase one year earlier. The decline is consistent with the central bank's expectation of a slowdown in economic activity following the hike in interest rates and the gradual implementation of a fiscal adjustment programme agreed with the International Monetary Fund. Although the new reading poses downside risk to our outlook, we are sticking to our end-2011 forecast of 5.0% real GDP growth.

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