Tourism fell from first to fourth place during the covid pandemic and is already in second position
The ranking of the country’s foreign exchange generators is being recomposed, with ample possibilities that at the end of 2022 the positions will return to the order that interrupted the economic paralysis caused in 2020 by the covid-19 pandemic.
Tourism, which was relegated from the first individual place to a remote fourth place, is already in second position, behind family remittances, which since the year of covid have led the flow of foreign currency to the Dominican Republic.
At the end of 2019, tourism led the country’s foreign exchange earnings, with US$7,471.5 million, the largest individual amount of income by generating sectors, closely followed by remittances, which contributed US$7,087.1 million.
The largest amount that year corresponded to the export sector, with US$11,192.7 million, but of that balance, exports from free zones accounted for more than half, US$6,249.5 million, with third individual place and fourth place for exports. national, which ended 2019 with a value of US$4,602.9 million.
A year later, all the amounts of the currency generators fell. The most resounding fall occurred in tourism, which registered a balance of just US$2,267.8 million, a figure that represented less than a third of the US$7,471.5 million of the previous period.
Since March 2020, the country was closed, and in this situation it lasted, for purposes of tourist flights, practically the rest of the year.
Exports of goods also suffered slightly, with the consolidated one falling from US$11,192.7 million in 2019 to US$10,301.9 million in 2020. The component of free zones was the one with the smallest absolute and relative drop, although it gave up its balance to US$5,894.5 million, a down from just over US$300 million.
Last year 2021, when the general economy had an extraordinary recovery, going from -6.7% in 2020 to 12.3% in the following period, it was also back on the path of good performance for foreign exchange generators.
Exports rose to US$12,462.0 million, of which those from free zones contributed US$7,129.5 million, to occupy the second position in the ranking of the largest generators of foreign currency to the national economy.
Family remittances preserved the first place, with US$10,402.5 million, and tourism began to walk its return route, coming in third place, with a contribution of US$5,686.5 million, according to figures contained in the balance of payments published by the Bank Center of the Dominican Republic.
For the end of the year, assuming the behavior of the first nine months of 2022, remittances will remain in first place, but tourism will approach them and will remain in a voluminous second place.
Recent preliminary figures from the Central Bank placed exports with a balance at the end of the third quarter of the year for US$10,549.0 million, of which US$6,000 million corresponded to the free zones.
Remittances accumulated US$7,309.4 million, closely followed by tourism, which registered US$6,341.9 million. For direct foreign investment, revenues as of September 30 were recorded for US$2,870.4 million.
When it announced the behavior of foreign exchange generators in the first nine months of 2022, the BCRD spoke of an “unprecedented flow of the tourism sector”, and also noted: “This year has been extraordinary for the tourism sector in the Dominican Republic, exceeding expectations of recovery after the challenge that the Covid-19 pandemic and the Russia-Ukraine war have meant for international tourism”.
The four largest sectors that generate foreign currency accumulated income at the end of September for US$27,064.7 million.
recent explanation
Governor Héctor Valdez Albizu then highlighted that “an unprecedented flow was registered in the arrival of non-resident passengers, accumulating 5.3 million visitors in nine months, according to data announced by the Ministry of Tourism, that is, 6.5% and 6.9 % more non-resident visitors than in 2018 and 2019, respectively”.
He also referred to the “impulse of free zones”, highlighting that “manufacturing in free zones has been a key activity for economic recovery, promoting the national productive chain and the expansion of exports.”
He also highlighted that “particularly, in terms of real value added, it registered a year-on-year growth of 6.6% in January-September of this year, in line with the 11.7% increase in exports of this sector in said period.”
Exchange rate stability benefits income
Exchange rate stability was the main beneficiary of the good performance experienced in the first three quarters of the year by foreign exchange generators. According to the governor of the BCRD, “these higher foreign exchange earnings have favored the relative stability of the exchange rate, reflected in an accumulated appreciation of the local currency of 7% at the end of September, being the second largest after Uruguay, which has registered 7.1%. In addition, they have contributed to the strengthening of international reserves to close to US$14,000 million, equivalent to 12.3% of GDP and 5.7 months of imports, exceeding the metrics recommended by the International Monetary Fund (IMF)”.
