He Central Bank of the Dominican Republic (BCRD) reported today that the economy grew by 4.8% in July of this year, accumulating an average interannual performance of 5.0% in the first seven months, falling within the projections of international organizations and the monetary authority itself.
The variation of the monthly indicator of economic activity (IMAE) for the period January-July places the Dominican Republic as the economy of largest year-on-year increase compared to its Latin American peers, according to the latest information available to date published by the central banks of other countries.
- The Latest projections The International Monetary Fund (IMF) estimates the country’s GDP growth for this year at 5.1%, the World Bank at 5.1%, and the Economic Commission for Latin America (ECLAC) at 5.2%.
Through an information document, the BCRD stated that the behavior has taken place in an environment of price stability as a result of the monetary and fiscal policies implemented, which has allowed the risk factors for the performance of the Dominican economy to be overcome in a timely manner.
The performance of the country’s productive sectors
The year-on-year variation of 5.0% in January-July 2024 is due to the performance of activities such as construction (4.6%) and manufacturing of free zones (6.4%), highlighting that exports under this regime amounted to 4,965.5 million dollars in the referred period.
Likewise, the service activities Together, they showed a cumulative increase of 5.4% compared to the same period of the previous year, among which real estate and rental activities (5.9%), transportation and storage (5.9%), communications (5.3%) and hotels, bars and restaurants (8.0%) stand out, the latter largely supported by the arrival of 5,286,325 tourists by air during the first seven months of the year.
The document states that in July 2023 the activity hotels, bars and restaurants experienced a year-on-year expansion of 9.3%, so the 3.8% growth in July 2024 compared to the same month last year is partly due to the statistical effect of the comparison base.
However, he points out that in July 2024 it was the highest in absolute terms for the same month in the entire historical series, with an arrival of air passengers of 811,192 non-residents and it is projected that the year will close with a total of 8.6 million tourists entering through the country’s various airports.
About the agricultural activity, The country saw a year-on-year growth of 4.2% in January-July of this year, with notable increases in the production of plantains, bananas, avocados, chicken, eggs, among others. “In this sense, the technical and financial support directed to agricultural producers at the national level provided by the Government through the Ministry of Agriculture has contributed significantly,” the note says.
Regarding the activity of financial intermediationthis presented an interannual variation in its real added value of 8.0% in January-July, with the impact on this result being the interannual expansion of 15.3% of the credit granted to the private sector in national currency, equivalent to 230,838.2 million additional pesos with respect to July of the previous year.
“The trajectory observed by the economic activity It shows the resilience of the national productive apparatus in the current global context, in which the interest rates The global economic outlook for global markets remains relatively high compared to what was expected at the beginning of the year, and economic agents’ expectations have been affected by the uncertainty associated with geopolitical conflicts in the Middle East and Eastern Europe, which has been reflected in greater volatility in raw material prices.
A look at the global panorama
“Despite the global outlook, United States of America The US, the country’s main trading partner, has shown positive signs in its main macroeconomic indicators. In this regard, expectations regarding a possible easing of international financial conditions remain favourable, given a clearer outlook regarding the upcoming adjustments in the Federal Reserve’s (Fed) policy that would not alter the inflation trend towards the 2% target,” the monetary authority considered.
This has been supported by the president of the institution, who in his most recent speech at the annual economic conference in Jackson Hole, Wyomingstated that ‘the time has come for politics to adjust’ and the interest rate cuts will be subject to the short-term evolution of the outlook and the balance of risks. “Indeed, this would provide greater freedom to implement monetary policies at the domestic level, supporting economic growth without compromising the inflation target,” he added.
The highest authority stressed that the Dominican economy is in a good position to maintain a growth rate around its potential, taking into account the strength of its macroeconomic fundamentals, the resilience of the productive sectors and the improvement in country risk indicators in international markets.
