He informed that the country has political and social stability, as well as a diversified productive system, which have facilitated the attraction of foreign direct investment, which exceeded US$4 billion in 2022.
The governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, is participating in the Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group, which are being held from April 10 to 15, in Washington D.C., United States of America.
Valdez Albizu participated in the Central America, Panama and Dominican Republic (CAPDR) meeting with IMF authorities, which was attended by the region’s central bank presidents and finance ministers. In his appearance, the Governor indicated that the close coordination of policies between the BCRD and the Government has made it possible to successfully overcome the multiple challenges of recent years, such as the COVID-19 pandemic, geopolitical conflicts, disproportionate increases in commodity prices, financial turbulence in international markets and the occurrence of extreme weather phenomena, making it one of the fastest growing economies in the region and improving the quality of life of the population, especially the most vulnerable.
Valdez Albizu expressed that the timely adoption of economic policies, together with a successful management of the health crisis through an efficient vaccination program, contributed to a rapid recovery of economic growth, which reached 12.3% in 2021 and 4.9% in 2022. Additionally, he highlighted the efforts of the Government, headed by President Luis Abinader, to protect lower-income households, through increases in targeted subsidies, the expansion of health insurance, support programs for micro and small businesses, among other measures.
The governor reported that significant improvements have been achieved in labor and social indicators, reflected in an employed population that has surpassed the pre-pandemic level and in an open unemployment rate that decreased from 8.0% in 2021 to 4.8% in 2022. He highlighted the role of women in the recovery of employment, since 65% of the jobs generated since 2020 correspond to the female employed population. He also expressed that the monetary poverty rate was reduced from 23.9% to 21.8% during the same period, which is an extraordinary achievement after a crisis as deep as that of COVID-19.
The governor highlighted the leading role of tourism as a spearhead for the recovery of economic activity. In this regard, he reported that during the year 2022 the Dominican Republic received 7.2 million tourists by air and 1.3 million cruise passengers, for a total of 8.5 million non-resident visitors, 12.4% higher than the total received prior to the pandemic and which generated more than US$8.4 billion last year. This dynamism of tourism and the favorable performance of other foreign exchange generating activities has contributed to the strengthening of international reserves, which currently exceed US$16 billion, equivalent to more than 13% of the GDP and more than 6 months of imports.
Valdez Albizu expressed that, as a result of the dynamism of the Dominican economy, the nominal Gross Domestic Product in dollars reached some US$114 billion at the close of 2022, while the GDP per capita in dollars increased from US$8,971.9 in 2021 to US$10,732.9 in 2022. The growth of the economy, together with prudent management of public finances and excellent management of liabilities by the Ministry of Finance, contributed to a reduction in the consolidated public debt ratio, which went from 69.1% of GDP in 2020 to 58.6% of GDP by the end of 2022.
In addition, he reported that the country has political and social stability, as well as a diversified productive system, which have facilitated the attraction of foreign direct investment, which exceeded US$4 billion in 2022 and are being allocated for the development of tourism projects, the expansion of free zones and logistics centers taking advantage of the nearshoring phenomenon and the expansion of mining projects, among others.
Valdez Albizu emphasized that the BCRD is currently focused on the fight against high inflationary pressures, through the adoption of timely monetary measures. These policies have contributed to a significant reduction in inter-annual inflation, which went from a high of 9.64% in April 2022 to 5.90% in March 2023; while core inflation has also decreased, currently standing at 6.16%. He said that the forecast models indicate that inflation would converge to the target range of 4.0% ± 1.0% by the middle of this year, which would provide the space to begin to normalize the monetary stance in a timely manner and support economic growth.
In that sense, the Governor expressed that “from the Central Bank we feel confident that the comprehensive implementation of these policies will continue to increase the resilience of our economy, supporting sustained economic growth, which we project would close the year 2023 between 4.0% and 4.5%, which would contribute to better conditions for our population.”
As part of these meetings, Governor Valdez Albizu will participate in a meeting organized by IMF Managing Director Kristalina Georgieva with economic authorities from Latin America, Canada and the United States, in which they will exchange views on global economic trends, the high uncertainty and its effects on the region.
Likewise, the BCRD Governor will make a presentation at the Constituent Meeting, led by Afonso Bevilaqua, IMF Executive Director for Brazil and president of the chair of the countries to which the Dominican Republic belongs at the IMF. In addition, Valdez Albizu will hold a meeting with Rodrigo Valdes, new director of the IMF’s Western Hemisphere Department.
In addition to participating in the Spring Meetings, BCRD authorities are holding meetings with financial entities, investment banks and financial analysts interested in investing in the Dominican Republic, as a reflection of the strength of its macroeconomic fundamentals and good business climate.