The acceleration of capital spending by the government in the last quarter of 2021 was decisive in achieving an economic result higher than the official projections for the end of the year.
And thanks to that and other factors, the Monthly Indicator of Economic Activity (IMAE) for December 2021 registered an increase of 10.6% compared to the same month of the previous year, the Central Bank of the Dominican Republic (BCRD) said yesterday in a presentation of results.
It reported that the real Gross Domestic Product (GDP) reached a remarkable year-on-year growth of 12.3% in the period January-December 2021.
When comparing the behavior of the Dominican Republic in 2021 with the latest GDP projections published by the International Monetary Fund (IMF) for the Latin American region, this result places the country as the best performer in real terms compared to pre-pandemic levels. .
GDP growth stood at 4.7% in 2021 compared to 2019, reflecting a real reactivation of the Dominican economy instead of a statistical rebound, contrary to the case of many Latin American economies, whose levels of economic activity will not exceed existing ones prior to the pandemic, according to official figures from the issuer.
“The timely implementation of monetary and fiscal measures, in order to mitigate the economic impact of the health crisis, were crucial for the recovery of the economy.
The broad monetary stimulus plan put in place since the beginning of the pandemic of RD$215 billion, which was channeled through financial intermediaries to the productive sectors, especially Micro, small and medium-sized enterprises (MSMEs) and households ”, recalled the BCRD.
These monetary measures implemented and which are cited by the institution, have benefited more than 92,000 credit users and fostered the dynamism of loans to the private sector in national currency, which expanded around 11% as of December 31, 2021.
In a complementary way, in the fiscal area, in addition to the acceleration of public investment, the increase in spending in the health and education sectors, as well as in social programs with the aim of moderating the repercussions of the pandemic on jobs and families’ income.
Likewise, they influenced the favorable economic results, the relaxation of mobility restrictions and operations of economic activities and the execution of the Tourism Reactivation Plan directed by the Tourism Cabinet headed by President Luis Abinader and coordinated by the Minister of Tourism David Hill.
Additionally, the progress of the vaccination plan against covid-19 carried out by the Health Cabinet led by the Vice President of the Republic, Raquel Peña, contributed. In this sense, it has been possible to inoculate 79% of the adult population with one dose and 66% with two doses, above the average vaccination rates in the region.
In another order, said the BCRD, the process of consolidating public finances with an increase in revenue collection and a rationalization of public spending in 2021, allowed the fiscal accounts to reflect a primary surplus, which contributes to the sustainability of the public debt. Likewise, the effective strategy for managing liabilities and placing public debt, led by Finance Minister Jochi Vicente, stands out.
Tourism and construction led expansion
Regarding the detail by economic activity for the period January-December 2021, the sectors that registered the most significant increases in their real value added compared to the year 2020 were: hotels, bars and restaurants (39.5%); construction (23.4%); free zone manufacturing (20.3%); transportation and storage (12.9%); trade (12.9%); local manufacturing (10.6%); other service activities (6.4%); and energy and water (6.0%).
The BCRD highlights the recovery of the agricultural sector, evidencing a growth of 6.0% in the last quarter of the year, driven mainly by increased production of the different agricultural items for national consumption, increasing their availability in popular markets and convenience stores. catering. This increase in the supply of food has contributed to reducing pressures in the behavior of domestic prices for this group.
According to the preliminary results of the National Continuous Labor Force Survey carried out by the bank, in the fourth quarter of 2021 the behavior of the labor market continued its recovery path, reflecting the effects of the evolution of the Dominican economy.
