Economist Winston Mars warned that high interest rates in the Dominican Republic are having a negative impact on multiple productive sectors, limiting economic growth and increasing unemployment.
“A high interest rate restricts the level of investment in the economy, as the cost of money for the development of new businesses is very high, as well as to expand demanding businesses.”
Marte explained that the construction sector, vital to achieve the potential growth of the country (estimated at 5% per year), has suffered a decrease and stagnation Due to the increase in credit. Construction companies face difficulties to finance projects, which slows down the activity economic.
“The deceleration of the construction sector largely is due to the high interest rates of the credits required by project development companies.”
In the field of housing, Mars said that long -term fixed rates – 10, 15 or 20 years – usually exceed 14% per year, which It significantly increases total payment of homes for acquirers.
“High interest rates, greater than 12% annual, significantly limit the development of new projects and businesses by young people, women and entrepreneurs in a general sense.”
In addition, the economist stressed that the consumption of goods and services by households is affected, which directly affects trade and sectors such as agricultural and agribusiness.
“The high interest rates affect the development of agricultural and agro -industrial projects, making financing more and reducing rural investment.”
In short, Mars concluded that high interest rates represent an obstacle to the country’s economic dynamism:
“High interest rates mean greater cost of money for consumption and investment, directly affecting the economic growth of the country and contributing to the increase in unemployment in a general sense.”
