According to the Central Bank report, the average expansion of the economy was 6.0% during the first months of the year compared to the same period in 2021, due to year-on-year variations of 6.3% in January and 5.8% in February 2022.
SANTO DOMINGO – The relentless rise in the cost of materials, along with other factors such as the Russia-Ukraine conflict, has hampered the growth of the construction sector in the country. The Central Bank of the Dominican Republic (BCRD) report for January-February places the year-on-year increase in this sector at an average of just 4.8%.
The moderation of the year-on-year increase in this sector is explained by the significant rise in the costs of the main imported inputs and raw materials used by this activity, according to the Monthly Indicator of Economic Activity (IMAE).
According to the report, the average expansion of the economy was 6.0% during the first months of the year compared to the same period in 2021, due to year-on-year variations of 6.3% in January and 5.8% in February 2022.
The Central Bank of the Dominican Republic (BCRD) indicates that for the January-February period, the sectors that showed the best performance, on average, in their added value were: hotels, bars and restaurants (37.1%), other service activities (11.2%), manufacturing in free zones (10.2%), commerce (9.6%), transport and storage (9.3%), financial services (7.7%), energy and water (7.5%), communications (6.9%) and health (6.3%), among others.
The Central Bank also adjusted its economic growth outlook for 2022 to 5.0%, which implies a reduction compared to the projections reported in January of this year, when they were between 5.5% and 6.0%.
The governing body cites the Russia-Ukraine military conflict as the main cause of this reduction, "which has caused an increase in levels of uncertainty and exacerbated the negative supply shock that had been generated as a result of the COVID-19 pandemic.".
The document adds that this impacts higher prices for inputs and primary goods for production, including oil, combined with persistent disruptions in supply chains that raised them.
It highlights that the dynamism of the activity of hotels, bars and restaurants responds to the remarkable increase of 171.7% in the arrival of tourists in the first two months of the year compared to the same period of 2021, with a total of 1,097,187 tourists.
On the other hand, the average increase in value added in trade activities (9.6%) and transport and storage (9.3%) in January-February is closely linked to the performance in the production, distribution and marketing of agricultural and manufactured goods of local and imported origin, as well as by the land flow of passengers.
Regarding the manufacturing industry, it cites the average year-on-year increase of 10.2% in the real value added of the Free Zones in the first two months of the year, reflected in the annualized relative variation of 13.2% of the sector's exports, which show an accumulated total of US$1,107.8 million at the end of February.
“Regarding local manufacturing, this sector saw an average increase of 5.2% in its real value added in January-February 2022 compared to the same period of the previous year. Particularly, a favorable performance was observed in the production of beverages and tobacco products, petroleum refining, and the manufacture of chemical substances and products.”.
“Additionally, construction experienced an average expansion of 4.8% in January-February 2022. The moderation of the year-on-year increase in this sector is explained by the significant rise in the costs of the main inputs and imported raw materials used by this activity.”.
