SANTO DOMINGO – Preliminary figures for the Monthly Index of Economic Activity (IMAE) for May 2025 show a year-on-year expansion of 3.1%, higher than the 1.7% year-on-year change recorded in April. This growth was primarily driven by improved performance in the mining, agriculture, local manufacturing, and construction sectors. As a result, the accumulated economic growth for the January-May 2025 period stands at 2.6% compared to the same period of the previous year.
The Central Bank notes that restrictive financial and liquidity conditions persist globally, reflected in relatively high interest rates in capital markets. Furthermore, high volatility is observed in the prices of financial assets (bonds, stocks) and commodities, within an international environment characterized by increasing uncertainty, exacerbated by the recent escalation of the conflict in the Middle East between Israel and Iran. In this regard, the head of the International Monetary Fund (IMF), Kristalina Georgieva, has warned that these geopolitical tensions would not only affect energy prices, but would also have implications for risk premiums and logistics costs.
"It should also be noted that during the last meeting of the Federal Open Market Committee (FOMC), Federal Reserve Chairman Jerome Powell reiterated that conditions are not yet sufficient to begin a rate-cutting cycle in the United States. Consequently, a restrictive monetary policy stance will be maintained until there is conclusive evidence of sustained convergence of inflation toward its 2% target. This comes at a time marked by announcements of changes in the country's trade, fiscal, regulatory, and immigration policies, which could translate into lower economic growth and additional pressures on prices. In this regard, the latest revision of the economic growth estimate for the United States for the first quarter of 2025, released this morning, shows an annualized quarter-on-quarter change of -0.5%, while inflation stands at 2.4% at the end of May," the agency said in a statement.
He adds that once the adverse international context dissipates and the Fed resumes its monetary policy easing process, central banks in emerging economies, including the Dominican Republic, would have greater room to contribute to economic growth without compromising price and overall macroeconomic stability. He emphasizes
that, as has been demonstrated on previous occasions, the Dominican economy has shown remarkable resilience and recovery capacity in the face of slowdowns, and that once external sources of uncertainty are controlled and economic actors' expectations stabilize, the path will be cleared for the acceleration of various economic activities.
“In particular, the recent stimulus measures by the Monetary Board, releasing RD$81 billion to support productive sectors, are expected to boost the economy in the coming months as the monetary policy transmission mechanism operates. Foreign exchange inflows from foreign direct investment, remittances, exports, and tourism are also expected to contribute positively.”
Analyzing the accumulated IMAE (Monthly Index of Economic Activity) results for January-May 2025, positive year-on-year variations are observed in agriculture, mining and quarrying, local manufacturing, free zone manufacturing, and the services sector as a whole. Within the latter, financial services, transportation and storage, commerce, and real estate and rental activities stand out.
It is important to highlight that, in May 2025, construction activity registered a year-on-year growth rate of 1.9%, higher than its cumulative performance during the first four months of the year. This allowed the year-on-year variation for the January-May period to reach -1.5%, an improvement compared to the cumulative result of -2.3% in January-April.
As for mining, it experienced a year-on-year variation of 21.0% in May, due to the increase in gold and silver extraction volumes of 35.6% and 28.7%, respectively, in the month, placing the cumulative growth of this activity at 2.2% for January-May.
In terms of real value added, the hotels, bars, and restaurants sector reported year-on-year growth of 2.6% in the January-May 2025 period, mainly driven by the strong performance of food and beverage services, which offset the slowdown observed in the accommodation segment.
Regarding tourism, it should be noted that the growth rate of non-resident foreign arrivals slowed during the first months of 2025. This reduction is mainly attributed to a decrease in air travel from the United States and Canada. In this context, the Ministry of Tourism has reacted proactively, developing strategies aimed at diversifying source markets and attracting tourists from other regions, as well as promoting cruise ship arrivals, to mitigate and offset the impact of the decline in air travel by North American tourists on the country's foreign exchange earnings.
Financial intermediation activity registered a remarkable year-on-year growth of 8.2% during the period January-May 2025. This performance is mainly explained by the expansion of credit to the private sector, which increased by 9.8% in both local and foreign currency, representing an increase of 210 billion compared to May 2024.
Finally, the agricultural sector registered year-on-year growth of 4.9% in the period January-May 2025, driven primarily by increases in the production of rice, plantains, bananas, avocados, eggs, and chickens, among other products. This result has been made possible thanks to the technical and financial support provided by the Government, through the Ministry of Agriculture and its agencies, whose support has strengthened the country's food and nutritional security.
