Construction is operating at a loss due to multiple factors. Source/Justo Feliz.
Both sectors represent fundamental pillars in the dynamism of the national economy.
SANTO DOMINGO.- Both the construction and tourism sectors are experiencing a slowdown in their growth rate during the first months of this year, according to the latest report released by the Central Bank of the Dominican Republic (BCRD).
In the case of the concrete block and cement sector, its decline is due to a group of factors that have impacted its dynamism. The regulatory body, in its latest report detailing economic growth for the January-April period, attributed the situation in the construction sector to uncertainty generated abroad and the high interest rates prevailing in the market.
“Construction activity accumulated a year-on-year variation of -2.3% in January-April 2025, affected by the uncertain external environment and by relatively high real interest rates, reflected in the readjustment of construction schedules for private sector projects. This has translated into lower demand for the main inputs used in construction and a slowdown in the sector,” the Central Bank of the Dominican Republic (BCRD) emphasizes.
Regarding tourism activity, the BCRD notes a moderation in the growth rate of non-resident foreign arrivals since mid-2024. “This trend continued in the first months of 2025, largely due to the decrease in air traffic of non-resident foreigners from the United States and Canada,” it points out.
It highlights that the Ministry of Tourism is proactively working to attract tourists from other countries to mitigate the impact of the North American region. “In terms of value added for hotels, bars, and restaurants, this sector showed a year-on-year increase of 2.9% in January-April 2025, largely driven by the positive performance of food and beverage services, which offset the performance of the accommodation service component.”.
The Central Bank highlights that external liquidity conditions remain tight and interest rates in international markets remain relatively high. “Furthermore, a climate of global uncertainty persists, marked by announcements of changes in the United States' trade, fiscal, regulatory, and immigration policies, which could translate into lower economic growth and additional pressure on price behavior in that country.” “In addition
, the Chairman of the Federal Reserve of the United States (Fed), Jerome Powell, reiterated that conditions are not yet sufficient to continue the cycle of interest rate reductions, and therefore, rates are expected to remain restrictive for a longer period than anticipated.”
In that sense, the easing of monetary conditions in our main trading partner would give greater leeway to domestic monetary policy to contribute to the reactivation of productive activities, without compromising the main objective of the Central Bank of the Dominican Republic, which is the maintenance of price and overall macroeconomic stability.”.
Other lines
In the January-April period, the Monthly Indicator of Economic Activity (IMAE) registered an average year-on-year growth of 2.5%. This result reflects a moderation in the pace of economic expansion, associated with a slowdown in domestic demand, particularly private investment, a component prone to reacting to changes in the expectations of economic agents, which have been affected by the adverse international environment. In addition, government capital spending remains below the historical average, explains the Central Bank.
Analyzing the performance of different economic activities in January-April 2025, positive growth rates are observed in agriculture (4.8%), local manufacturing (1.5%), free trade zone manufacturing (0.8%), and the services sector as a whole (3.4%). Within this latter sector, financial services (9.6%), transportation and storage (4.8%), trade (3.6%), and real estate and rental activities (3.4%) stand out.
Mining activity experienced a year-on-year decrease of 2.2% in January-April of this year. This decline is primarily attributed to the slowdown in gold and silver extraction. It should also be noted that operations have been affected by conflicts between local communities where the country's main deposits are located and mining companies, generating tensions over the relocation of residents and environmental concerns.
Financial intermediation activity experienced a notable year-on-year increase of 9.6% in January-April 2025. This result was driven by a 10.8% expansion of credit granted to the private sector in both local and foreign currency, equivalent to an additional RD$228 billion compared to April 2024.
Finally, the agricultural sector showed year-on-year growth of 4.8% in January-April 2025, fueled by increased production of rice, plantains, bananas, avocados, eggs, chicken, and other crops. This positive performance has been supported by the technical and financial assistance provided to agricultural producers nationwide by the Government, through the Ministry of Agriculture and its agencies. These measures have contributed to agroforestry development and the country's food and nutritional security.
