DR reaches historic quarterly high in foreign exchange inflows

The Minister of Economy, Planning and Development, Pável Isa Contreras, highlighted in a recent activity with businessmen the remarkable performance of the Dominican Republic’s external sector. He said that for the first time in history, foreign exchange earnings from exports, tourism, remittances and foreign direct investment (FDI) have exceeded US$11 billion in the first quarter of 2024.

Isa Contreras attributed this achievement to the performance of tourism revenues, which continue to grow at a significant rate. In addition, the increase in income derived from FDI and remittances has been key to reaching this record figure, offsetting the reduction in national exports, especially gold, which have faced specific production challenges.

The minister explained that, although gold exports have declined due to production problems in the main exporting companies, a recovery is expected in the second half of the year. Likewise, exports of manufactured goods have been affected by the political and economic crisis in Haiti, the second most important export market for the Dominican Republic.

However, Isa Contreras is confident that a normalization of the political situation in Haiti and an improvement in gold production will allow export revenue levels to recover.

Investment

Isa Contreras also highlighted the fundamental role of foreign direct investment, which in 2023 reached a figure equivalent to 3.6% of gross domestic product (GDP), exceeding US$4.35 billion. This increase is not only significant in terms of volume, but also in the diversification of sectors receiving these investments. While in the past tourism was the main recipient of foreign investment, now sectors such as energy, mining, commerce, telecommunications and free zones are attracting a greater flow of foreign capital.

“The diversification of foreign investment is positive because it reduces the economic vulnerability of relying on one or two sectors. This promotes greater stability and reflects the confidence of foreign investors in the Dominican Republic,” he said.

The minister highlighted the importance of the availability of foreign exchange for economic growth, especially in a small economy like the Dominican Republic. The ability to import investment and consumer goods is crucial for economic development. “Foreign exchange restriction is a critical variable for growth.
Having access to foreign exchange does not guarantee growth, but it greatly facilitates it,” he explained.

As a result, this has not only allowed for “solid” economic performance in the first quarter of 2024, but also promises greater stability and diversification in the future.

Source:eldinero.com.do

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Dominican Republic Live Editor

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