The moderation of inflation is as a result of the monetary restriction plan, as well as the fiscal measures
The Governor of Central Bank, Hector Valdez Albizuaffirmed yesterday to authorities of the International Monetary Fund (IMF) that year-on-year inflation has been moderating recently, going from a maximum of 9.64% in April to 8.80% in August and forecasts indicate that moderation will continue, converging to the target range of 4% in the second half of 2023, in to the extent that external shocks dissipate and the transmission of monetary policy continues to operate”.
He stressed that this moderation in inflation is “as a result of the monetary restriction plan, as well as the fiscal measures to counteract the high prices of commodities and the appreciation of the exchange rate.”
Upon receiving the new chief of mission assigned by the IMF for the Dominican Republic, Emilio Fernández-Corugedowho will exercise his function in substitution of Stephen Vesperonialso present at the meeting, the governor highlighted that the financial system maintains a robust performance with a return on equity (ROE) of 22.2% as of July and on assets (ROA) of 2.5%.
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He stated that in the current year 2022 the Dominican economy registered an expansion of 5.5% in the January-July period, after growing by 4.7% year-on-year during the month of July.
In this context, economic growth is expected for the end of 2022 of around 5.0%, one of the highest expansions in the region.
He referred to the good evolution of the labor market, pointing out that the favorable economic performance has contributed to a recovery of jobs to pre-pandemic levels, currently standing at around 4.7 million employed (formal and informal).
Valdez Alzikbu pointed out the good results of the external sector, beginning by highlighting the remarkable performance of the tourism sector, after the arrival of 4.9 million non-residents in January-August 2022, for a year-on-year increase of 66.9%.
Foreign exchange generators in the country
The governor estimated that the total flow of foreign exchange-generating activities will exceed US$35 billion. Given this circumstance, an accumulated appreciation of the currency at the end of August of 8.2% has been observed, contrary to what is happening in most countries in the region. In this way, international reserves exceed US$ 14 billion at the end of August.
