August 20, 2010 / 7:14 PM / 9 years ago

UPDATE 1-Dominican Republic economy to grow 5.5-6 pct -IMF

* Estimate revised upward based on first half performance

* IMF sees “very positive results” of economic program

(Updates with quotes, background, details)

SANTO DOMINGO, Aug 20 (Reuters) - Dominican Republic’s economy will expand between 5.5 percent and 6 percent this year, the International Monetary Fund said on Friday, slightly raising its outlook for the Caribbean country.

The country’s economy grew 7.5 percent in the first half of 2010, the Washington-based lender said in a statement issued after an IMF mission visit to Santo Domingo. This followed a similar growth level registered in the first quarter.

The mission was part of a $1.66 billion stand-by program approved by the IMF in November.

“The first phase of the authorities’ economic program that envisaged supportive macroeconomic policies ended in June with very positive results,” the IMF said.

“Real gross domestic product recovered rapidly. Other indicators of economic activity have recovered and continue expanding at healthy rates.”

The IMF had previously forecast growth for this year of between 5 percent and 5.5 percent.

The economy is rebounding after the global recession spurred a sharp drop last year in Dominican Republic’s export earnings along with declines in tourism and remittances, forcing the country to seek a stand-by agreement with the IMF.

Under the program, President Leonel Fernandez has committed to tackling shortfalls in revenue and to implementing a comprehensive reform of the Dominican Republic’s crisis-ridden electricity sector.

Despite the progress, the IMF mission said the electrical reforms have failed to produce financial savings for the government. The country is also facing delays in government plans to improve tax collection, it said. (Reporting by Kevin Gray; Editing by Kenneth Barry)

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