The Development Policy Loan will help the nation strengthen the management of government expenditure, enhancing transparency and improve its monitoring of government operations. As a result, it is hoped the Dominican Republic will see a much-desired fall in public sector debt and more inclusive growth.

Sophie Sirtaine, World Bank country director for the Caribbean, said: “We are encouraged by the Dominican authorities’ commitment to improve service delivery to the poorest and most vulnerable.

“The government’s reforms to manage its public finances more effectively are a clear sign of this commitment, and the following measures will be important for consolidating the gains achieved in recent years.”

The Dominican Republic is the largest economy in the Caribbean and Central American region. It enjoyed the largest growth rate in Latin America and the Caribbean in 2014, helping to boost employment and reduce poverty.

The Dominican deficit is expected to shrink to less than 2% of gross domestic product this, however macroeconomic and fiscal forecasts estimate the public sector debt stock to remain between 41.4-51.2% of GDP in 2018.

One reform to be financed by the World Bank’s will improve the flexibility and transparency of public debt management by fostering greater coordination between institutions that issue public debt and developing laws that enable renegotiation of existing debt under more favourable conditions.

Others include the use of results-based financing to improve delivery in the health sector and regular publication of poverty statistics to enhance transparency and monitoring of government operations.

The loan comes from the World Bank’s Bank for Reconstruction and Development with a fixed spread, customised repayment schedule and total repayment of 23 years, including a grace period of 11 years.