The economy will grow more than expected: BCRD says it will be 12%

Tourism, construction and free trade zones are the activities with the highest contribution; private sector has been vital in the improvement.
Backed by the improvement in sectors such as hotels, bars and restaurants, construction and free zones, among others, the monthly indicator of economic activity (IMAE) registered an accumulated average increase of 12.5% in January-November 2021 in the Dominican Republic, after experiencing an inter-annual variation of 13.1% in November.

This growth performance, higher than expected by the monetary authorities, leads to the conclusion, according to the governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, that the current year would be ending with an increase in real gross domestic product (GDP) of around 12%, or more. This would place the country as one of the highest in Latin America. The previous projection, from last month, pointed to an increase in the local economy of 11%.

When comparing the levels of economic activity in November 2021 in relation to the same month of 2019, that is to say, to the pre-pandemic, the difference is 4.3%, higher than what had been predicted.

It is not an improvement that came on its own. For this it was necessary to have a series of stimuli from the State, on the one hand, and great will on the other. “The private sector has played a fundamental role in this whole process of economic recovery,” Valdez Albizu emphasized in a virtual press conference, together with other bank officials.

He cited, for example, the boost to private investment in tourism, construction and free zones. “Without a doubt, the free zone sector has been a determining factor in the economic recovery, the reception of foreign direct investment and the creation of jobs,” he said.

“The work done by the tourism sector, with President Luis Abinader heading and coordinating the activities, and with the minister (David Collado), contributed to put tourism, which constitutes the backbone of the country, on the right path,” the governor said in another part of his presentation.

According to the numbers presented, the sectors that registered the most significant inter-annual variations with respect to 2020 were: hotels, bars and restaurants (38.3 %); construction (25.1 %); free zone manufacturing (21.2 %); transportation and storage (13.0 %); commerce (11.8 %); local manufacturing (11.0 %); other service activities (5.8 %); and energy and water (5.3 %).

Regarding prices, Governor Valdez Albizu highlighted that, as in the rest of the countries, inflationary pressures have been more persistent than expected, driven by the behavior of commodities and problems in the supply chains, geopolitical and other problems that have affected the world.

The BCRD looks optimistic about the course the local economy will follow, and takes it for granted that it will be much better, projecting, for example, that non-resident visitor arrivals would be around five million by the end of 2021.

“This good performance has been supported by the progress of the vaccination plan, led by the Vice President of the Republic, Raquel Peña, which has managed to inoculate approximately 77% of the adult population with one dose and surpassing 64% with two doses, one of the highest vaccination rates in the region, raising the confidence of tourists to visit the country,” Valdez Albizu said.

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