Dominican Republic cenbank upbeat about 2021 growth

The Dominican Republic’s central bank expects the country to grow 5.5-6.0% in 2021.

Central bank governor Héctor Valdez Albizu said in a press release that the entity had executed Latin America’s biggest liquidity provision program of about $190bn pesos (US$3.28bn), equal to 4% of GDP, targeting the private sector.

And 25.8bn pesos are still available for loans. Authorities are also evaluating new liquidity facilities, having issued 72bn pesos in loans to help economic activity.

Valdez Albizu also highlighted a major year-on-year recovery from a contraction of 29.8% in April to a drop of 1% in December. Overall, the economy contracted 6.7% last year, compared to a regional average drop of 7.4%, according to IMF estimates.

While the central bank is evaluating additional loans, details were not disclosed.

A US$2.5bn sovereign bond in January secured half of this year’s budget as the government reduced debt repayments a further US$430mn through a liability management operation in December.

Excluding the hospitality sector, GDP grew 2.3% in December, which proves the positive effects of economic stimulus measures, Valdez Albizu said.

International reserves were at a historic high of US$12.2bn by February 5, representing 15% of GDP and covering eight months of imports. The figures are above IMF guidelines of 10% of GDP and three months of imports.

The development was helped by remittances rising to US$8.22bn, partially offsetting the slowdown in tourism due to the COVID-19 pandemic.

Growth is boosted by infrastructure works like the US$300mn Monte Grande multi-purpose dam that is scheduled for inauguration in 2022 and the extension of capital Santo Domingo’s metro line No. 1 that started last year with the help of a $150mn loan from the French Development Agency (AFD).

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