The Governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, received the mission of the International Monetary Fund (IMF), headed by Esteban Vesperoni, which for two weeks has carried out, in compliance with Article IV of the Fund’s Articles of Agreement, an evaluation of the Dominican Republic’s economy, reviewing its current state through interaction with departments of the Central Bank, as well as with other public and private economic institutions in the country.
Esteban Vesperoni told the Governor that the IMF’s assessment of the performance of the Dominican economy is positive, “demonstrating a remarkable resilience, due in large part to the successful response in monetary and fiscal policy that has been sequenced in the country”. In this regard, he highlighted the impulse that the monetary policy has given to the recovery of the economy, as well as the agility of the Government in offering aid to the most vulnerable sectors in moments of weakness during the pandemic.
The IMF official emphasized that “this year may present challenges due to a combination of elements such as the invasion of Ukraine, the pandemic that is gaining strength again in relevant countries such as China, or the necessary normalization of monetary policy by the Federal Reserve (FED) of the United States, having been able to confirm for our part that the Dominican Republic enters this period in a situation of strength”.
Vesperoni also noted that the Dominican economy had a very important recovery in 2021 at the sectoral level, highlighting tourism for its importance and the steady growth in the number of tourists received.
He also stressed that “it is clear that the recovery of the Dominican economy in 2021 was not a statistical rebound, it was a real recovery of 5% in relation to the pre-pandemic, achieved in a climate of stability, in a period in which the external sector has shown strength”. He also indicated that he was able to confirm in his two weeks of meetings in the country that “the private sector understands and appreciates what has been achieved in terms of monetary policy”.
Vesperoni said that the most important challenge ahead is to face inflationary pressures, “there is no country in the world that is exempt from this, since we are talking about energy, food, production chains, transportation, among other challenges of the global economy”. He emphasized the wisdom of the Central Bank’s decisions on monetary policy rate increases to keep the expectations of economic agents regarding the evolution of this variable anchored.
Regarding the outlook, the head of the mission stated that “we see its economy converging to its potential level in a situation of a stable external sector and financial system”.
Governor Valdez Albizu pointed out that the vision obtained by the IMF mission is very much in line with that of the Central Bank, indicating that, as he explained to the organization in a recent meeting, there was “a perfect storm on top of another perfect storm” which has affected the price of hydrocarbons, the availability of containers and the cost of freight, added to the COVID-19 problem, which paralyzed airports and commerce”.
He also highlighted the efforts made in monetary policy, which served to support micro, small and medium enterprises, the export sector, as well as Dominican households, among other beneficiaries.
Valdez Albizu expressed to Vesperoni that the Dominican economy recovered faster than expected in 2021, with a remarkable growth of 12.3 %, equivalent to an expansion of 4.7 % compared to the level of real output in 2019, prior to the pandemic. He noted that the good performance has been maintained in the first quarter of the current year with a cumulative growth of 6.1 %.
The governor noted that the economic revival process benefited from the large monetary stimulus program of approximately 5 % of gross domestic product (GDP) implemented at the beginning of the COVID-19 crisis, as well as the significant improvement in the health situation.
In addition, he pointed to the rapid recovery of tourism. “During the first quarter of 2022, more than 1.7 million tourists have been received, which allows projecting that this year could reach close to 7 million visitors.”
The IMF Mission, headed by Vesperoni, was composed of Pamela Madrid, Nicolás Fernández Arias, Mario Mansilla, Hassan Adan, Dirk Van Grolleman and the Dominican representative to the IMF, Frank Fuentes.
Governor Valdez Albizu was accompanied by Deputy Governor, Clarissa de la Rocha de Torres; Manager, Ervin Novas Bello; Deputy General Manager, Frank Montaño Peña; Deputy Manager of Monetary, Exchange and Financial Policies, Joel Tejeda Comprés; Government Advisor, Julio Andújar Scheker; and Deputy Manager of National Accounts and Economic Statistics, Ramón Antonio González Hernández.
Also present were the director of Monetary Programming and Economic Studies, Joel González; the director of the International Department, Brenda Villanueva; the director of Financial Regulation and Stability, Máximo Rodríguez; and the director of the Treasury Department, Yamileh García Belén.