The Ministry of Economy, Planning and Development publishes the 2022-2026 Macroeconomic Framework updated at the end of last March. This indicates that it is expected for this year that the Gross Domestic Product (GDP) of the Dominican Republic grow 5% in real terms. Also, in line with his potential growth.
The Macroeconomic Framework collects the official projections in the short and medium term on the main macroeconomic variables (GDP growth, inflation, exchange rate, among others). According to the current year and the following four-year term.
These projections are made by technical consensus with the central bank and the Treasury (and its dependencies). Carried out under the provisions of article 27 of Law 498-06 on Planning and Public Investment. This document serves as the basis for the formulation of the General State Budget and the elaboration of the National Multiannual Plan for the Public Sector.
The document, produced by Vice Ministry of Economic and Social Analysis (VAES)highlights that in the national context during 2021. The Dominican economy showed a favorable behavior, demonstrating great resilience in the face of the adverse effects that occurred in the period.
Remember that in real terms, a product growth of 12.3%. In relation to the end of the previous year and 4.7% in relation to the pre-pandemic levels of 2019.
It indicates that this same indicator, during the month of January, registered a year-over-year expansion of 6.3%. A better than expected result given the context of an accelerated spread of the omicron variant since December 2021.
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Post-pandemic recovery
It also specifies that this post pandemic recovery derives from the implementation of a series of monetary and fiscal measures. In order to mitigate the ieconomic impact of the health crisis, highlighting the broad monetary stimulus plan since the start of the pandemic for RD$215 billion aimed at the productive sectors.
He specifies that in terms of fiscal measures, the acceleration of the public investment, increased spending in the education and health sectors. And the implementation of social protection programs, in order to soften the effects of the pandemic on employment and the income of vulnerable households.
In the same way, the effect of the gradual reactivation of the economic activitythe relaxation of mobility restrictions, the Tourism Reactivation Plan and the advancement of the national vaccination plan against Covid-19.
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Macroeconomic Outlook of growth
Remember that the ultimate expectations of increase for 2022 (Medium-Term Macroeconomic Outlook updated to November 2021) were inclined to a economic performance above potential with 5.5%.
However, he points out that “the international fabric on which the Dominican economy is developed begins 2022 with a much more complex panorama.”
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The Macroeconomic Framework points out that “the uncertainty that permeates international markets, the persistent disruptions in supply chains. Likewise, the climatic shocks that have continued to put pressure on the prices of some commodities. As well as a greater persistence of the inflationary pressurespredict a less favorable international environment”.
Likewise, it maintains that the pressures caused by “the Russia-Ukraine conflict also exacerbate the inflationary pressures. In addition, they diminish the growth prospects of the advanced economiesparticularly from the euro zone.
“All of the above has caused a downward revision of the growth projections for the economy in the year 2022. Which is placed at 5%, consistent with potential growth”, he emphasizes.
