SANTO DOMINGO.– Along with the hotel, bar and restaurant sector (8.3%), construction was the second largest sector of the economy (6.4%) during the past month of January, according to the preliminary results of economic activity issued yesterday by the Central Bank of the Dominican Republic (BCRD).
The Central Bank report also indicates that the monthly indicator of economic activity (IMAE) registered an expansion of 4.6% during the month of January of this year, thus continuing the upward trend that the economy has been exhibiting since the last months of 2023.
“This recent performance of the Dominican economy is consistent with the favorable operation of the monetary policy transmission mechanism and with the highest level of public capital spending recorded since 2013, primarily in the second half of the year. This has contributed to sectors such as construction, which has a significant multiplier effect and drives growth in other economic sectors, continuing to register positive growth rates. In turn, the Central Bank has placed more than RD$190 billion at rates no higher than 9.0% annually, which have been channeled through financial intermediaries to facilitate loans to productive sectors and households,” the report states.
The agency reported that the year-on-year variation for the month of January is also explained by the sectors other services (5.7%), financial services (5.6%), transport (5.3%), commerce (4.8%), local manufacturing (2.2%), among others.
"Regarding the hotel, bar, and restaurant sector, its performance during January 2024 was largely driven by the arrival of 742,229 air passengers, which, together with the 319,410 cruise ship passengers, totals 1,061,639 visitors during that period. Furthermore, the loan portfolio directed to the sector increased by 12.0% compared to January 2023," the report states.
The Central Bank of the Dominican Republic (BCRD) highlights that most economic activities registered positive performance in the first month of 2024, with the exception of mining, whose 17.4% decline is largely explained by the cessation of operations of one of the ferronickel extraction companies since December 2023. It maintains that the slowdown in the gold and silver extraction process, due to the plan to upgrade the facilities required for the continuity of mining activity at the country's main deposit, has impacted the sector's performance. "It is expected that this process will normalize in the coming months of this year and that production levels will return to normal.".
He said that the positive trend in the economy has been recorded since the second half of last year and was more pronounced in October-December when growth reached 4.2%, with the year-on-year variation of 4.7% in December 2023 contributing to this result.
The report indicates that financial intermediation activity showed a year-on-year increase of 5.6% in its real value added for the period under analysis. This growth was driven by a 21.4% year-on-year expansion of credit granted to the private sector in local currency, equivalent to an additional RD$290,057 million compared to the same month of the previous year.
It adds that agricultural activity registered a year-on-year growth of 3.6% in January of this year, with increases in the production of rice, plantains, chicken, eggs, and other products. The technical and financial support provided to agricultural producers nationwide by the Government through the Ministry of Agriculture has had a significant impact on this growth.
It adds that this performance aligns with projections from various international organizations and credit rating agencies, which place the Dominican Republic among the fastest-growing economies in the region by the end of this year.
"Furthermore, in January 2024, local manufacturing registered a year-on-year growth of 2.2%, consistent with the monthly manufacturing activity index (IMAM) of the Association of Industries of the Dominican Republic (AIRD), which rose from 56.6 in December 2023 to 66.1 in the first month of 2024, exceeding the 50.0 threshold considered positive."
Similarly, manufacturing in free zones shows exports of US$539.8 million in the aforementioned month of January and an increase of 0.9% in its added value compared to the same period in 2023.
