The Central Bank (BCRD) reported that between January and May 2022, remittances received reached US$4,057.2 million. It also highlights that this amount exceeds by US$1,186.9 million the remittances received in the first five months of 2019, a period prior to the start of the COVID-19 pandemic, and in which the United States did not yet have the aid schemes that were implemented after March 2020 and ended in September 2021, which is why when comparing the flows received as of May 2022 with those of 2021, a reduction is observed.
In May 2022, remittances totaled US$851.2 million. These figures reaffirm the establishment of a new level of monthly remittance flows of around US$800.0 million. In that sense, when comparing this May 2022 amount with the value averaged in the same month for the period prior to the 2015-2019 pandemic, which was US$492.9 million, a significant increase is observed.
The issuing entity explains that the labor market conditions in the United States (US) is one of the main factors that continues to influence the behavior of remittances, since from that country came 84.9% of the flows in May. During that month, the US economy created 390 thousand jobs, keeping the unemployment rate at 3.6 % in May 2022. In particular, Hispanic unemployment in the US increased slightly from 4.1% in April to 4.3% in May.
The BCRD also highlights the receipt of remittances from other countries, such as Spain, in the order of 6.4%, the second country in terms of total Dominican diaspora residents abroad, as well as Haiti and Italy with 1.2% and 0.8% of the flows received, respectively. The rest of the remittances received are divided among countries such as Switzerland, Canada and Panama, among others.
Regarding the distribution of remittances received by provinces, the BCRD indicates that the National District obtained the highest proportion, 33.5%, followed by the provinces of Santiago and Santo Domingo, with 14.4% and 8.9%, respectively. This indicates that more than half (56.8%) of remittances are received in the metropolitan areas of the country.
The BCRD reaffirms that the evolution of the external sector for this year will be characterized by the dynamism of remittances, exports, foreign direct investment and the recovery of tourism, which in recent months has registered record figures in tourist arrivals. These developments will contribute to a greater flow of foreign currency into the country and will help maintain the relative stability of the exchange rate currently observed, such that the exchange rate showed an appreciation of 4.0 % at the end of May with respect to December 2021. All these elements, together with the country’s strong macroeconomic fundamentals, indicate that the Dominican Republic possesses particularly favorable conditions to accommodate adverse shocks affecting the prevailing international environment.
The institution highlights that this greater flow of foreign exchange has also allowed the accumulation of international reserves, which by the end of May 2022 stood at around US$14.25 billion, representing 13.3% of GDP and equivalent to 5.9 months of imports. These metrics exceed the levels recommended by the IMF, contributing to the Dominican Republic maintaining a favorable external position, projecting an inflow of remittances for the end of 2002 of close to US$10 billion and a current account deficit of around 3.0 % of GDP.