Dominican economy shows resilience in 2022, experts say

Central Bank reported that the DR economy will grow 4.9% in 2022.

In the opinion of several economists, the 4.9 % growth of the real gross domestic product (GDP) registered during 2022, is a sign that the Dominican Republic is resilient in the face of external shocks.

“Evidently a 4.9% growth is commendable in a context of difficulties in the world economy,” explained Rafael Espinal, coordinator of the Economics degree program at the Santo Domingo Institute of Technology (Intec), on the data offered by the Central Bank of the Dominican Republic (BCRD).

He explained that the last two quarters of 2022 were seriously affected by the rise in interest rates, as is the case of construction, which barely grew 1.6%, falls in gold production and the industrial sector affected by the rise in rates and prices of international raw materials, freight and supply difficulties.

“Even so, the economy grew successfully,” Espinal said.

In contrast, economist Ivan Rodriguez explained to Diario Libre that statistics reflect that the Dominican economy continued in 2022 the post-COVID recovery achieved in 2021, but warns that the omens for 2023 are not very optimistic for the economies of the world.

Resilient economy

“It has been demonstrated in several scenarios and in the face of other strong crises, that our economy is resilientEconomia Dominicana and has good macroeconomic fundamentals that guarantee stability and this is manifested in the good results of foreign exchange generators, especially those of tourism and remittances,” Rodriguez highlighted.

He added that 2022 was a year of enormous difficulties for the world economy, which continued to be affected by the aftermath of COVID-19 and the impacts of the Russian-Ukrainian war.

He added that those factors continued to push the supply chain crisis around the world and geopolitics became more complicated with tensions between China and Taiwan.

“All of this led the Central Bank to take tough restrictive measures that held back private consumption and in part investment levels,” he said.

Despite this, Rodriguez added, GDP growth was almost on par with its potential of 5%, with the Dominican Republic continuing to be among the fastest growing countries in the region and achieving the goal of controlling inflation. he said.

Central Bank

The BCRD reported this Monday that the real gross domestic product (GDP) registered a growth of 4.9% in 2022, after the monthly indicator of economic activity (IMAE) experienced an inter-annual variation of 3.3% in the month of December, in line with the latest projections of this institution.

Regarding nominal GDP, the Central Bank indicated that an increase of some US$18.476 billion is projected to reach around US$114 billion, which further improves the proportion of debt over GDP with respect to the previously estimated.

Likewise, such figure allows reaching a GDP per capita of approximately US$10,700 in 2022 higher than the US$8,971.9 verified in 2021, placing the country as the seventh largest economy in Latin America.

Economic activities

Regarding the details of the behavior of economic activities in 2022, the BCRD explained that the important incidence of the services sector as a whole stands out, which represents approximately 60.0 % of the total size of the economy, with an expansion of 6.5 % in real terms during the past year.

This was led by hotels, bars and restaurants (24.0 %), followed by health (11.3 %), other service activities (8.2 %), public administration (8.5 %), transportation and storage (6.4 %), financial services (5.8 %) and commerce (5.4 %).

On the other hand, he informed that agriculture and livestock recorded a growth of 5.0 %; while, within the industrial activity, which constitutes around one third of the GDP, increases of 5.4 % were verified in free trade zone manufacturing, 2.2 % in local manufacturing and 0.6 % in construction.

As previously highlighted, the activity with the highest contribution to the GDP result in 2022 was hotels, bars and restaurants, registering a year-on-year expansion of 24.0 % in its real value added.

The performance of this sector was mainly driven by the total arrival of 7.2 million tourists by air, reaching a historical record.

The dynamism was also seen in the unprecedented arrival of 1.3 million cruise ship passengers at the country’s various ports. In this way, some 8.5 million visitors arrived last year, according to Ministry of Tourism figures.

On the other hand, in the performance of the manufacturing industry during the year 2022, the activity of the free trade zones stands out, which recorded an inter-annual increase of 5.4%, due to the increase in exports of goods to supply external demand.

The development evidenced by this sector corresponds to the growing number of companies established under this regime that promote the creation of new formal jobs, registering 192,291 employees in the sector as of December 2022, according to information provided by the National Council of Export Processing Zones (CNZFE).

It also highlights the flow of direct investments destined to the sector in response to the climate of stability and attractive opportunities offered by the Dominican Republic.


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