The dominican economy has expanded 5.6% year-on-year as of August of this year, encouraged by a context of price stability, lower inflation and a reduction in interest rates.
The information was detailed today by the governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, who indicated that the economy shows a cumulative growth of 5.1% between January and August of this year, as shown by the Monthly Indicator of Economic Activity (IMAE).
He indicated that this result places the country “as the economy of greatest growth in Latin America to date.”
Within the framework of seventy-seventh anniversary of the BCRD, the governor valued the resilience of the national productive apparatus, in the face of a global scenario in which, although it has overcome the COVID-19 pandemic, it still faces geopolitical crises that impact the prices of raw materials and oil. , generating uncertainty throughout the world.
He indicated that the year-on-year inflation It stood at 3.29% in September 2024, while core inflation, which shows the monetary conditions of the economy, reached 4.01%.
Valdez Albizu indicated that the inflation rates They have been able to be maintained thanks to a correct establishment of monetary policy.
- Despite the “uncertain outlook” at the international level, the economy of The United States grew 2.6%while its inflation was reduced to 2%, a scenario that allowed the federal funds rates to be reduced by 50 basis points.
This perspective influenced the Central Bank will reduce the policy rate from 7% to 6.75% monetary in August, taking it to 25 basis points below in September, placing it at 6.50%. In this way, the rate accumulates a reduction of 200 basis points from May 2023.
The sectors that grew the most
In that sense, the free zones (6.6%) and construction (4.9%) were the two sectors that had the most impact on boosting the growth of the dominican economy during the first eight months of 2023.
Meanwhile, the services sector experienced an increase of 5.4%, supported by:
- Financial services (8.1%)
- Hotels, bars and restaurants (7.1%)
- Transportation and storage (5.9%)
- Real estate and rental activities (5.8%)
Projections for next year
The governor highlighted that the behavior that the dominican economy indicates that the 2024 with a growth of 5.0%with a range of between 4.5% and 5.0% by 2025.
However, he highlighted that this is a percentage that the Central Bank maintains “to be conservative and have some security“, since international organizations such as the International Monetary Fund (IMF), estimate an expansion between 5.1% and 5.2%.
Meanwhile, the inflation would be located in 3.5% at the end of 2024, which would converge to 4.0% for next year.
“We are fully complying with our constitutional commitment to guarantee the stability through the inflation“he assured.
Likewise, he indicated that the current account deficit It would be 3% of the gross domestic product (GDP), which would be covered by foreign direct investment, which would exceed 4.5 billion dollars by the end of this year.
