Foreign Direct Investment (FDI) amounted to US$4.381 billion in 2023, an increase of around 9.2%.
SANTO DOMINGO.- The construction sector ended 2023 with a growth of 2.1%, according to preliminary results of economic activity at the close of 2023, released yesterday by the Central Bank of the Dominican Republic.
In December, however, the concrete block and rebar industry was the second sector to register growth, with 9.7%. The Central Bank highlights in its report that this sector has registered positive growth rates consecutively since July 2023.
“This reflects the greater dynamism in the execution of public capital spending compared to the same period of the previous year, as well as the favorable impact of the liquidity provision measures using securities from the Ministry of Finance and the Central Bank as collateral, implemented by the monetary authorities to accelerate the transmission mechanism of monetary policy,” it highlights.
In 2022, the growth of the construction sector was only 0.6%, according to figures for the period January-December of that year, released by the Central Bank.
The report details the results regarding Foreign Direct Investment (FDI), which amounted to US$4.381 billion in 2023, an increase of around 9.2% compared to the amount received in 2022, highlighting the evolution of the tourism, energy and real estate sectors.
Impulse
The financial institution notes that during the recently concluded year, the facilities provided by the Central Bank allowed the channeling of some RD$184 billion at interest rates no higher than 9.0% per year through financial intermediaries to facilitate loans to productive sectors and households.
It maintains that, together with the 150-basis-point reduction in the monetary policy rate, these measures have led to a decrease in the weighted average of market interest rates of approximately 200 basis points, and have in turn had a positive impact on the recovery of economic growth.
Hotels, bars, and restaurants
Hotels, bars and restaurants was the activity that experienced the best performance in December 2023, with 10.5%, followed by financial services at 9.4%, free zone manufacturing at 4.8% and agriculture at 4.3%, according to the report.
When analyzing the behavior of the hotel, bar and restaurant activity during January-December 2023, the BCRD establishes that it registered a year-on-year growth of 10.7%, being the one with the greatest impact on economic activity in the aforementioned year.
“The performance of the real value added of this activity was mainly driven by the arrival of passengers by air, which reached 8,058,671 tourists in January-December 2023. It should be noted that, considering the arrival of 2,259,292 cruise passengers in December, the total number of visitors to the country in 2023 reached an unprecedented 10.3 million. In this regard, foreign exchange earnings for the country from this source amounted to US$9,828.9 million, representing a year-on-year growth of 16.9% compared to 2022.”
Regarding financial intermediation activity, the report highlights that it exhibited a year-on-year variation of 6.9% in its real added value in January-December 2023, influenced by the year-on-year expansion of 20.7% of credit granted to the private sector in national currency at the close of December 2023, equivalent to an absolute increase of RD$279,482 million in channeled loans.
Remittances
The report highlights the positive performance of foreign exchange-generating activities, noting that US$10,157.2 million in remittances were received in 2023, in line with the Central Bank of the Dominican Republic's (BCRD) projections, representing a 3.1% increase compared to the same period of the previous year. "These resources provided by the diaspora undoubtedly have a multiplier effect on consumption, investment, and financing for the most vulnerable sectors.".
“Finally, these results bode well for the Dominican economy’s performance in 2024, with a projected growth of 5%, around the potential rate, one of the highest in Latin America, in a context where domestic inflation would remain within the target range established in the monetary program of 4% ± 1% and Foreign Direct Investment (FDI) flows would continue.”.
