After a day of meetings with the main monetary, financial and government entities, the mission of the International Monetary Fund (IMF) concluded with a report in which it maintains an economic growth outlook of 3% for the Dominican Republic at the end of 2023, while it expects a positive performance of 5.2% for 2024.
“For the Dominican economy, we think that the Gross Domestic Product (GDP) would be growing around three percent by 2023, due to the slowdown of the global economy, the restrictive global financial conditions, and the prudent domestic policies adopted,” said Emilio Fernandez-Corugedo, IMF mission chief.
He pointed out that the preliminary results of its economic assessment continue to be in line with the forecasts reflected in the World Economic Outlook report of October of this year.
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As for inflation, he said they expect it to end these twelve months at 4 % – within the target range 4.0 %± 1.0 %- “Largely thanks to the monetary measures carried out since 2021 and the fiscal measures implemented during 2022 and this year,” the executive said.
Inflation expectations are “strongly” anchored around the inflation target. In that sense, Fernandez stressed that the monetary authority has more than fulfilled those inflation duties.
IMF Mission Projections for 2024
He went on to say that the measures adopted have laid a solid foundation to support economic growth from 2024 onwards. The process of monetary policy normalization complemented by other actions implemented by the Central Bank, along with increased public infrastructure spending, would help the economy grow by 5.2 %.
If stability is maintained, it said that growth is expected to expand around 5 % and inflation is projected to remain within its target range.
On the other hand, the Mission highlighted the robustness of the Dominican financial system, which presents adequate levels of:
Capitalization
Liquidity
Profitability
In addition to the economy, the mission valued the fiscal sector: “Our fiscal projections contemplate an appropriate and gradual consolidation in the medium term, as well as a gradual improvement in the current account of the external sector,” it said.
In the latter case, it is important to emphasize that foreign direct investment continues to be an important source of financing for the current account, with expected flows exceeding US$4 billion in 2023 and close to US$4.5 billion in 2024.
“The good performance of foreign direct investment reflects the confidence of foreign investors in the solid economic fundamentals of the Dominican Republic,” concluded Fernandez.
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