Tourism, remittances, private sector and investment contributed to recovery

Tourism, remittances, employment recovery, private sector impulse and foreign investment contributed to the Dominican Republic’s post pandemic economic recovery.

These elements are key to the reactivation of the national productive apparatus at the end of 2021, according to the December 2021 Situation Monitoring Report, prepared by the Vice Ministry of Economic and Social Analysis (VAES).

Regarding the tourism sector, at the end of November 2021, the arrival of foreign passengers by air amounted to 424,400 visitors, higher by 41 thousand received in November 2019, before the pandemic.

In total, foreign visits registered 3.1 million in the January-November period thus recovering 64% of the income registered in the same period of 2019 of 4.9 million.

When including non-resident Dominicans -whose income exceeds pre-pandemic levels-, passenger arrivals amounted to 519 thousand in the month for a total of 4.3 million

Meanwhile, national hotel occupancy presented a monthly increase of 9.5 percentage points (p.p.) and stood at 61.1% in October, exceeding by 6.0 p.p., the 2019 level of 55.1%.

Foreign exchange inflows through family remittances totaled at the close of the year with an all-time record of US$10,402.5 billion, for an increase of 46.8% over 2019 and 26.6% versus 2020.

The reason for this rise was due to the recovery in less time of the main issuing countries, in particular, the United States, with more than 80% of the flows received in the past year 2021.

Private sector
Regarding the contributions of the private sector, the recovery of the industries and the services sector has been fundamental in the favorable evolution of the economy.

In the January-November 2021 period, the hospitality industry (hotels, bars and restaurants) grew 38.3%, registering the largest expansion as a result of a clearly recovering tourism sector. This was followed by construction (25.1%), as well as free zone manufacturing (21.2%), transportation and storage (13.0%), commerce (11.8%) and local manufacturing (11.0%).

Sales declared to the DGII totaled 540.6 billion in November, a monthly increase of 7.7%. The services, industry and agriculture and livestock sectors presented a positive variation of 8.7%, 5.1% and 3.9%, respectively. In the mining and quarrying sector (27.4% monthly); financial intermediation, insurance and others (15.7%).

Foreign direct investment
Foreign direct investment accumulated a total balance of US$2,484.9 million up to September 2021, by entering US$799.8 million in the third quarter. With respect to January-September 2020, it obtained an increase of 35.3%; while, when comparing with the same period of 2019, a drop of 1.3% was observed. Officially, a balance of US$3 billion was projected at the end of 2021.

Employment
Another line item within the national economic recovery is employment. Formal employment was above pre-pandemic levels, totaling 2.3 million jobs in November 2021.

Employed positions increased by 0.96% on a monthly basis. The variation is explained by a larger increase in private sector employees, especially those earning between 15 thousand and 30 thousand pesos per month (6.4%) and more than $50 thousand pesos (0.01%).

The increase in public sector jobs also contributed: those earning salaries of less than 10 thousand (10.3%), between 10 thousand and 15 thousand (0.6%), between 30 thousand and 50 thousand (0.2%) and more than 50 thousand (0.2%).

The open unemployment rate (SU1) decreased by 0.8 p.p. in the third quarter of the year with respect to the second half of 2021 and stands at 6.8%.

As of the third quarter of 2020, a positive trend has been observed in the evolution of occupancy indicators, approaching pre-pandemic levels. Total employment reached 4,598,409 in the third quarter of 2021, with an increase of 302,960 jobs compared to the same quarter of the previous year, equivalent to a growth of 7.1%.

The increase in the number of employed is explained by an increase in the category of unpaid family members (32.1% year-on-year), domestic service workers (25.8%), followed by employers or partners (15.7% year-on-year), private employees (7.2%), state employees (5.5%) and, lastly, self-employed (3.7%).

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