Juan Ariel Jiménez denies Abinader and shows that the current debt finances current spending, not past debts

Santo Domingo.- Former Economy Minister Juan Ariel Jiménez denied the statements of President Luis Abinader, who assured that 80% of the loans contracted by his government have been allocated to the payment of commitments inherited from the administrations of Leonel Fernández and Danilo Medina. Through a series of posts on his X account, Jiménez explained, based on official data from the Ministry of Finance, the General Directorate of Public Credit, and the General Directorate of Budget (DIGEPRES), that this statement "does not correspond to the fiscal reality nor to the official records." In his thread titled “1 minute, 3 lies”, the former minister stated: “It is false that the debt was mostly used to pay off old debt, false that the government has reduced the debt as a percentage of GDP, and false that it is the only government where debt has been reduced proportionally.” According to figures from the General Directorate of Public Credit, between September 2020 and August 2025, the Government has disbursed US$38.302 million, of which US$17.660 million were used to amortize previous debt and US$18.991 million correspond to new net debt. Jiménez explained that if the money taken in loans were exclusively used to pay off old debt, the total balance would not increase, but the figures show the opposite. The economist illustrated his argument with a simple example: "If I owe 100 pesos and borrow 50, I owe 150. If I use the 50 to pay off old debt, I owe 100 again. But if I only pay 20, my new debt is 130; that is, a net increase of 30."

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Jiménez also pointed out that the supposed reduction of debt as a percentage of GDP, presented by the government as an achievement, is not due to prudent management of public finances, but to a statistical effect caused by the economic rebound after the pandemic. In 2020, with the economy closed due to COVID-19, GDP fell and the debt/GDP indicator soared to 56.5%. In 2021, when the economy reopened, GDP increased and the indicator fell to 50.4%, while in 2024 it stands at 46.2%, reflecting the growth of the denominator, not a real reduction in debt. The former minister also emphasized that it is not the first time the country has managed to reduce its debt in percentage terms.

"Between 1986 and 1996, between 1996 and 2000, and between 2004 and 2008, the debt also decreased as a proportion of GDP," he recalled, emphasizing that attributing this behavior exclusively to the current government is incorrect.

But his most relevant point concerns the use of public debt. Based on data from DIGEPRES, Jiménez showed that for the first time since 1991 the country has a current deficit, which means that the State spends more on daily operations than it collects.

"Since 2020, a current dis-saving has been generated, which is equivalent to borrowing to finance current spending and not public investment. This puts the country's fiscal sustainability at risk," he warned.

The graph accompanying his analysis shows that current savings went from +0.4% of GDP in 2019 to –5.3% in 2020, and has remained negative between –1.1% and –0.6% until 2024, confirming that debt is used to finance payrolls, subsidies, and other administrative expenses. “The government borrows a lot, but builds little,” Jiménez emphasized.

The former minister warned about the increase in the quasi-fiscal debt of the Central Bank, which according to his calculations "has almost doubled, as it hasn't been seen since the 2000-2004 period." He pointed out that the official narrative does not hold up against the data: "The government does not borrow to pay old debt, but to finance its current spending. That is the real cause of the deterioration of public finances."