SAN SALVADOR, EL SALVADOR – The tourism sector, along with real estate and energy, were the main destinations for foreign direct investment (FDI) last year, which totaled US$4.381 billion in 2023, stated Héctor Valdez Albizu, governor of the Central Bank of the Dominican Republic (BCRD), during his participation in the 60th anniversary and 300th Meeting of the Central American Monetary Council (CMCA), held in this country.
Albizu highlighted that remittances reached US$10.157 billion in the year, while exports stood at approximately US$12.9 billion in 2023, of which about US$7.9 billion corresponds to free zones.
“This performance of the external sector contributed to reducing the current account deficit in 2023 to approximately -3.8% of GDP, financed almost entirely by FDI flows. Thanks to this increased inflow of foreign currency, international reserves continued to strengthen, closing the year at approximately US$15.464 billion, representing roughly six months of imports and close to 13% of GDP, exceeding the thresholds recommended by the International Monetary Fund. Likewise, the relative stability of the exchange rate was maintained, registering a year-on-year depreciation of 3.2% at year-end, below the average of the last five pre-pandemic years,” he explained.
Valdez Albizu shared his remarks during his turn to speak at the event held on February 22 and 23 in San Salvador, El Salvador, a meeting attended by the presidents and governors of the region's central banks, as well as various experts from international organizations.
The governor of the Central Bank of the Dominican Republic (BCRD) said that the Dominican economy reflected a remarkable recovery in the last months of 2023, registering an expansion of 4.2% in the fourth quarter and 4.7% year-on-year in December, showing an average economic growth of 2.4% for 2023.
He highlighted that the strong performance of the Dominican economy has allowed for progress in the labor market. Specifically, he noted that the employed population has steadily increased, reaching 4.9 million workers, its highest level ever, equivalent to a year-on-year increase of 178,000 employed individuals by the end of 2023.
Additionally, Governor Valdez Albizu pointed to the significant reduction in inflationary pressures as the main achievement of 2023, thanks to the implementation of more favorable monetary and fiscal measures. Inflation fell from a peak of 9.64% in April 2022 to 3.32% in January 2024, below the target range of 4.0% ± 1.0%.
Similarly, he indicated that these advances created the space to initiate a monetary stimulus plan, through a 150 basis point reduction in the monetary policy rate, bringing it to 7.00% to date.
Regarding the outlook for the Dominican economy, he stated that inflation would remain around the target range of 4.0% ± 1.0% for 2024, under an active monetary policy scenario. Likewise, economic activity would continue its GDP growth trajectory, with growth expected to be around 5.0–5.5% annually this year.
During the meeting, each central bank was given the opportunity to present the current macroeconomic context and its outlook for 2024. Most presentations emphasized the importance of having reduced inflation and brought it within its target range in most countries, while maintaining the growth trajectory of the region's economies, thus achieving higher GDP growth by the end of this year.
Governor Valdez Albizu was accompanied at the event by Julio Andújar Scheker, Economic Advisor to the Governor; Joel González, Deputy Manager and Director of the Monetary Programming and Economic Studies Department; and Brenda Villanueva de Cardoza, Deputy Manager and Director of the International Department.
