Central Banks face fiscal challenges in Dominican Republic and Argentina

In the Dominican Republic, the government plans to transfer RD$44,555.8 million to the Central Bank in 2027. This transfer is intended for recapitalization to cover interest generated by debt issuances, addressing what is known as the “quasi-fiscal deficit.” This measure follows Law 167-07, which mandates annual transfers to the institution, though recent years have seen modifications to the transfer percentage of the GDP to manage growing debt.

In Argentina, technical analysis from the consultancy Zentrix warns of economic risks if 2026 budget assumptions are not met. The report highlights that failing to secure projected one-time revenues from Central Bank profits and hydroelectric sales could force deeper fiscal adjustments. Such a shortfall would likely impact provinces through reduced transfers for public works and an acceleration in the removal of energy subsidies. The analysis notes that high levels of automatic spending on pensions, salaries, and interest leave limited flexibility for budgetary adjustments.