The Dominican economy registered an inter-annual expansion of 4.6 % in January 2024, informed today the Central Bank of the Dominican Republic (BCRD).
Although most economic activities recorded a positive performance in the first month of the year, mining remains in the red: it fell 17.4 %, largely explained by the cessation of operations of the ferronickel extraction company, Falconbridge Dominicana, as of December 2023.
The slowdown in the gold and silver extraction process has also had an impact on the performance of the mining activity, due to the readjustment plan of facilities required for the continuity of the mining activity of Barrick Pueblo Viejo, the main deposit in the country.
“It is expected that this process will be normalized in the coming months of this year and that production levels will be regularized,” the BCRD said.
The BCRD specified that the monthly indicator of economic activity (IMAE) registered said the expansion of 4.6%, “thus continuing with the growing trend that the economy has been exhibiting since the last months of 2023″.
He added that this positive trend has been registered since the second half of last year and was more accentuated in October-December when growth reached 4.2 %, influencing this result the inter-annual variation of 4.7 % in December 2023.
“This behavior is in line with the projections of different international organizations and risk rating firms, which place the Dominican Republic as one of the fastest growing economies in the region for the end of this year,” the BCRD indicated.
The factors that had an impact
The inter-annual variation in January is mainly explained by the performance of hotels, bars and restaurants (8.3%), construction (6.4%), other services (5.7%), financial services (5.6%), transportation (5.3%), commerce (4.8%), local manufacturing (2.2%), among others, informed the BCRD.
The Central Bank pointed out that 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 expenditure recorded since 2023, mainly in the second half, thus contributing to sectors such as construction, of significant multiplier effect and dragging other economic sectors, continuing to record positive rates of variation”.
He recalled that it has placed more than 190 billion pesos, at rates no higher than 9.0% per annum, which have been channeled through financial intermediaries to facilitate loans to the productive sectors and households.
Behavior of manufacturing and other activities
For January 2024, local manufacturing registered an inter-annual growth of 2.2 %, in line with the monthly manufacturing activity index (IMAM) of the Association of Industries of the Dominican Republic (AIRD), which went from 56.6 in December 2023 to 66.1 in the first month of 2024, above the 50.0 threshold considered as positive, informed the Central Bank.
It added that free zone manufacturing exhibited exports for US$539.8 million in the referred January and an increase of 0.9% in its added value for the same period of 2023.
Concerning the hotels, bars, and restaurants activity, its performance during January 2024 was largely driven by the arrival of passengers by air, which reached 742,229 tourists, which together with the reception of 319,410 cruise passengers, totaled 1,061,639 visitors in that period.
It also reported that the credit portfolio directed to the sector increased by 12.0 % compared to January 2023.
The financial intermediation activity showed an inter-annual variation of 5.6 % in its real aggregate value for the period under analysis, influenced by the inter-annual expansion of 21.4 % of credit granted to the private sector in local currency, equivalent to an additional 290,057 million pesos concerning the same month of the previous year.
Agricultural activity recorded a year-on-year growth of 3.6% in January of this year, with increases in the production of rice, bananas, chicken, and eggs, among others.
Translated with DeepL.com (free version)
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