SANTO DOMINGO, RD. The Central Bank of the Dominican Republic (BCRD) reported that, between January and May 2024, remittances received reached US$4,382.3 million, increasing 5.0% compared to the same period of the previous year.
"It is important to highlight that, as in 2023, remittance flows continue to grow year-on-year. Specifically in May, US$887.1 million was received, exceeding the same month in 2023 by 0.7%. One aspect to emphasize is the multiplier effect these resources from the diaspora have on consumption, investment, and financing for the most vulnerable sectors," a statement from the organization noted.
The Central Bank explains that the economic performance of the United States was one of the main factors that influenced the behavior of remittances, since 87.3% of the formal flows in May originated from that country, some US$713.8 million.
On the one hand, the overall unemployment rate in the United States stood at 4.0% in May, a low level, despite representing a slight increase from the 3.9% recorded in April 2024, with the creation of 272,000 new jobs. On the other hand, the non-manufacturing Purchasing Managers' Index (PMI) from the Institute for Supply Management (ISM) registered a value of 53.8 in May, surpassing the 49.4 observed in April, thus indicating a return to expansion in the services sector, where a large part of the Dominican diaspora is employed.
The Central Bank of the Dominican Republic (BCRD) also highlights the receipt of remittances through formal channels from other countries in May, such as Spain, which received US$39.4 million, representing 4.8% of the total. Spain is the second largest recipient of remittances from the Dominican diaspora abroad. Haiti and Italy followed, receiving 1.0% and 0.7% of the total flows, respectively. Other countries receiving remittances include Switzerland, Canada, and Panama.
Regarding the distribution of remittances received by province, the Central Bank of the Dominican Republic (BCRD) indicates that the National District received 39.2% during May, followed by the provinces of Santiago and Santo Domingo, with 12.8% and 7.9%, respectively. This indicates that more than half (60.0%) of remittances are received in the country's metropolitan areas.
Analyzing recent trends in the external sector, the Central Bank of the Dominican Republic (BCRD) anticipates favorable growth in foreign exchange inflows during 2024, with tourism, foreign direct investment (FDI), and exports, along with remittances, being the most significant contributors. Remittances and FDI flows are projected to reach approximately US$10.4 billion and US$4.5 billion, respectively, by the end of the year. These foreign exchange inflows support the continued relative stability of the exchange rate currently observed, such that as of the end of May 2024, the Dominican currency had depreciated by 1.9% compared to the end of 2023.
The institution highlights that the higher flows of external income have also allowed for maintaining an adequate level of international reserves, which reached US$13,937.5 million at the end of May, covering about 5.0 months of imports, and equivalent to 11.3% of GDP, above the thresholds recommended by the IMF.
The Central Bank reaffirms its commitment to monitoring the current economic environment in order to continue taking the necessary measures to counteract the impact on the Dominican economy of the prevailing challenging international landscape, in order to guarantee price and exchange market stability.
