IDB: Local productivity grew only 0.7% in twelve years

The Dominican Republic is a reference economic in Latin America and the Caribbean, with a growth average of its gross domestic product (GDP) of 5%. However, six out of ten Dominicans work in the informalityand the productivity of the economy barely grew 0.7% between 2010 and 2022.

He IDB Group published his most recent report BIDeconomicsunder the title “Dominican Republic: panorama of opportunities”, in which the country’s resilience stands out, with indicators of prudent macroeconomic policies and structural reforms that have attracted enough investment foreign investment to boost sectors such as tourism, construction and manufacturing.

However, he emphasizes that there are still gaps that limit the potential of the Dominicans.

“A child born today will only be 50% productive at age 18, due to current gaps in education and health. Although it is expected to complete 12 years of schooling, when adjusting for the quality of learning, this figure is reduced to less than 7 years,” the document indicates.

According to the sectoral panorama of the entity, the informality is tall and productivity low, reflected in the fact that the Dominican Republic produces 60% of what the United States produces with the same inputs.

Added to this is that “a large part of the population is vulnerable and is exposed to events climatic. Four out of every ten Dominicans belong to the population vulnerablewhich puts them at risk of falling into poverty in the event of a shock economic or natural phenomenon,” adds the report.

BIDeconomics It is an initiative of IDB Group that offers analysis and proposals for countries in Central America, Haiti, Mexico, Panama and the Dominican Republicwith the aim of identifying opportunities for development through recommendations based on international practices in areas such as development human and productivity.

About him growth of the GDPhighlighted that the country climbed 17 positions worldwide, going from 89th place in 2005 to 72nd place in 2022.

He growth economic The average in 2022 was 5.4%, surpassing Costa Rica (3.8%), Guatemala (3.6%) and the regional data for Latin America and the Caribbean (2.3%), according to data from the Central Bank and the World Bank.

Income tributaries

The analysis adds a summary about the income tributaries of the Caribbean country, which represent 13.9% of the GDPwell below the regional average of 21.5%.

“This limits the ability to provide services quality audiences. Furthermore, the investment public is low, reaching only 1.7% compared to the average of 4.5% in Latin America and the Caribbean,” he says.

Two of the areas that stand out as lacking investment and that affects the citizenship are education and health; For example, public spending on health represents only 3.3% of GDP.

Remember that, after the COVID-19 pandemic, the country experienced a rapid recovery. “He GDP It contracted 6.7% in 2020, grew 12.3% in 2021 and 4.9% in 2022.

On the other hand, the cost of living has been kept under control, with a inflation average of 3.6% between 2010 and 2019″.

He IDB Group He stated that it is essential to define a strategy that guarantees a growth sustainable, inclusive and resilient. To this end, I cite as essential to strengthen the welfare and the capabilities of Dominicans, covering all stages of life, from childhood to old age, and promoting development of key skills for successful performance.

Furthermore, it is crucial to improve the conditions that allow both the public and private sectors to offer services of quality to the population, stimulating innovation business and generating productive opportunities and decent jobs.