The Central Bank of the Dominican Republic reported that the Monthly Indicator of Economic activity (IMAE) registered a year-on-year expansion of 6.3% in January, resulting better than expected behavior in the context of an accelerated spread in the country of the Omicron variant of the covid-19 then.
In detail, the sectors with the highest growth rates in their real added value were: hotels, bars and restaurants (28.9%), other service activities (9.9%), commerce (9.3%), transport and storage (9.2%), energy and water (7.0%), communications (6.9%), financial services (5.7%), health (5.7%), free zone manufacturing (5.0%), among others.
The performance of the hotels, bars and restaurants activity was notorious in the period, registering a growth of 28.9% in terms of real value added and explaining approximately a quarter of the growth in January. The behavior of this activity responds fundamentally, says the bank, to the 158.6% increase in the arrival of non-resident passengers during January 2022, for a total of 530,952 tourists in the first month of the year.
On the other hand, the increase in value added in trade activities (9.3%) and transport and storage (9.2%) is closely linked to the dynamism in the production, distribution and marketing of agricultural and manufactured goods of local and imported origin. . The joint contribution of these two activities to the growth of the IMAE in January was 28.4%, that is, 1.8 percentage points of the interannual increase of 6.3% referred to above.
Regarding the manufacturing sector, the interannual increase of 5.0% in real added value of the Free Zones is cited, reflected in the annualized increase of 6.7% of the sector’s exports, which totaled US$471.4 million at the end of January.
In relation to the manufacturing industries destined mainly for local production, they registered in January 2022 a growth of 2.2% in their real added value, with respect to the same month of the previous year. Particularly, the production of beverages and tobacco derivatives, oil refining, manufacturing of chemical substances and products and non-metallic minerals show favorable performance.
According to the report presented, the Monetary Program of the Central Bank projects that growth will be around 5.5%-6.0% in 2022, close to its potential.
However, it highlights that the military conflict between Russia and Ukraine has significantly increased the uncertainty of the international environment, due to its impact on world economic conditions, including trade flows and the increase in oil prices and other commoditieswhich could affect growth prospects for 2022.
The Central Bank will continue to monitor the adverse effects of this new shock on the Dominican economy in order to adopt the pertinent measures to help mitigate it.
“It should be noted that this behavior is consistent with the Monthly Index of Manufacturing Activity (IMAM) prepared by the Association of Industries of the Dominican Republic (AIRD), which is based on a different methodology than that of National Accounts since it collects qualitative information and not quantitative of the performance of a sample of companies in the sector”, indicated the BCRD.
Specifically, the indicator reflects the balance of opinion on the following variables: sales volume, production volume, employment behavior, delivery time taken by suppliers and behavior of supplies and raw materials inventories. To present the results, a comparison is made of the month subject to analysis with respect to the immediately previous one, while the IMAE presents interannual growth rates.
The report published by the aforementioned industrial union indicates that the IMAM rose from 61.1 in the month of December 2021 to 64.6 in January 2022, remaining above the threshold of 50.0, which indicates that the outlook for the sector is positive.
Additionally, the construction activity experienced a year-on-year growth of 2.4% in January 2022, a variation that places the activity levels of the sector 28.8% above its level in January 2019 and 13.4% with the same month of 2020. The dynamics of this This vital sector for the Dominican economy is supported by residential, industrial and tourist development projects promoted by the private sector, as well as by the execution of important civil engineering and urban improvement projects by the government.
