President Luis Abinader led, together with his government’s economic team, the presentation of the economic indicators that show that the Dominican Republic closed 2021 with a growth of the Gross Domestic Product (GDP) of 12.5%, of jobs and investments, and a reduction of the fiscal deficit.
The public debt increased in absolute terms, but the administrative debt of the institutions contracted in the past government was reduced, according to the president.
The Minister of Economy, Planning and Development, Miguel Ceara Hatton, explained that the sources of demand in the economy that drove this growth were investment, which accounted for 59% of the accumulated growth up to September, and exports, which accounted for 50% of the growth. Consumption, which had always been the most dynamic variant, supported 57%.
Since the last quarter of 2020, the investment ratio has remained above 30%. This investment has been mainly private, 95%. Public investment has also been recovering, reaching RD$9.9 billion per week by December 2021. That investment was lagging behind due to the institutional problems they had to face.
Minister of Economy, Planning and Development, Miguel Ceara Hatton. (External source )
Hatton pointed out that exports of goods and services have been a guarantee for the flow of foreign exchange in the country, which allowed stabilizing the exchange rate and generating a very satisfactory balance of payment situation.
The most dynamic sectors were free zone manufacturing, local manufacturing, health and construction. But the biggest contributors were hotels, bars and restaurants in the tourism sector (32%), construction (28%) and free zone manufacturing (24%).
Debt increased in absolute terms, although, due to the growth experienced by the GDP, there was a percentage reduction. Between December 2020 and November 2021, the percentage of consolidated debt in relation to GDP decreased by 6.4%. In other words, in December 2020 the debt ratio was 69.1% and in November 2021 it was 62%.
The minister explained that the fiscal deficit went from 336 billion in 2020 to 159 billion in 2021, for a reduction of 53% in terms of value. As a percentage of GDP, the deficit fell from 7.5% in 2019 to 3% in 2021.
Thanks to the prohibition on institutions contracting debt established in the 2021 Budget Law, the Government was able to dedicate itself to liquidating those left by the past administration.
Abinader pointed out that “from the more than 72,747 million pesos that we found as debt for accounts payable at the beginning of our constitutional mandate in 2020, we have been able to close the year 2021 with a significant reduction, to stand at just 18,850 million pesos, with a decrease therefore of 53,800 million.”
The Budget Director, José Rijo Presbot, specified that this concept represented 45.3% of the total debts of the State until August 2020.
The President regretted that “until 2020 it was common for public officials responsible for certain State institutions to make payments or sign transactional agreements for the recognition of administrative debts, systematically bypassing all procedures”.
He said that “the recognition of administrative debts was made without previously having the resources allocated in the General State Budget law, which is a serious violation of the rules in this matter, and a very harmful practice for the country’s public finances and taxpayers’ money.”
The Minister of Labor, Luis Miguel De Camps, was in charge of offering the data on the recovery of jobs. He said that in December 2021 there were more formal jobs than in February 2020, before the pandemic.
It went from 1,519,450 jobs to 1,666,864, for a creation of 147,414 jobs.
Abinader expressed that the new year comes with very good news in economic matters and stressed the importance of maintaining the country’s economic stability and achieving development based on sustained growth with clear and transparent accounts.