Although ECLAC reduces DR’s growth projection in 2023, it places the country among the leaders of that growth in the region, behind Panama, Paraguay, Caribbean islands, and Costa Rica
The Economic Commission for Latin America and the Caribbean (ECLAC) reduced growth projections for the Dominican economy in 2023 from 4.6% forecast in April to 3.7%, and, although it raised its projection for regional gross domestic product (GDP) from 1.2% estimated 5 months ago, the institute observed that the region continues showing a low growth “syndrome”.
“These are not the rates that one would like (the regional ones), they are relatively low, they could be worse… but they could be better”, said ECLAC executive secretary Jose Manuel Salazar during a press conference from Santiago, Chile.
Forecasts for 2024 indicate that the low dynamism in the region will continue and that the Dominican Republic will grow by 3%, according to the new data.
“The low growth of economic activity in 2023 and 2024 will result in a slowdown in employment growth” ECLAC warns.
A glimmer of light for inflation
ECLAC highlights some degree of positivity among the low growth, a tendency to reduce inflation in Latin American and Caribbean countries, “but not as before”.
“The reduction in inflation has been widespread in the region”, ECLAC says in its short-term report “Economic Survey of Latin American and the Caribbean 2023”, released yesterday during the press conference.
However, it indicates that, although there is a fall in inflationary dynamics, “the rate remains at higher levels than those seen before the pandemic and the target ranges of central banks, which suggest that the interest rates will remain relatively high for the rest of the year.”
From May 2020 to June 2022, inflation grew steadily and the latter month the regional year-on-year rate was 9.7%, the highest value recorded since 2005, ECLAC indicates.
Like the rest of the world, this regional dynamic reflected the effects of the COVID-19 pandemic and the increase in fuel and food prices as a result of the Russia-Ukraine war.
ECLAC, a United Nations agency, notes that, as of July 2022, regional inflation has trended downward. In June 2023, a total of 26 countries reported a lower inflation rate than at the end of 2022. In Central America and Mexico – including the Dominican Republic – it went to 4.8%.
Given this scenario, ECLAC’s executive secretary recommends that the region not wait for the world economy to get “out of the quagmire” “But rather, we should come up with our own productive development policies”.
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