Dominican Republic reaches the highest number of active workers in its history

Santo Domingo – The Dominican economy created 173,000 jobs in the last 12 months, and employment reached its highest historical level of 5,029,347 workers in the third quarter of 2024, for a growth of 3.6%.

Meanwhile, the open unemployment rate stood at 5.3% in that period, revealed the Governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, during his speech on the occasion of the BCRD’s 77th-anniversary celebration.

According to preliminary data from the National Continuous Labor Force Survey (ENCFT), the percentage of informality dropped from 56.7% in September 2023 to 55.3% in the same period of 2024.

He explained that this is because the generation of new jobs in the last twelve months was concentrated in formal occupations, that is, those who have access to social security benefits through their occupations.

He specified that out of the 173,000 jobs created, 144 thousand correspond to the formal sector, for an inter-annual growth of 6.9 %.

On the other hand, Valdez Albizu stated that monetary poverty stood at 19.0 % as of the second quarter of 2024, a reduction of 4.5 percentage points concerning the same period of 2023, according to the data estimated by the Inter-Institutional Technical Committee for the measurement of monetary poverty. This progress is mainly attributed to the increase in Dominican households’ nominal per capita income.

Concerning the Consumer Price Index (CPI), he indicated that the inter-annual inflation stood at 3.29% in September 2024, and the underlying inflation, which reflects the monetary conditions of the economy, reached 4.01% that month.

The Governor explained that in the current context of lower inflation and more favorable monetary conditions, private loans in local currency grew by 14% year-on-year in September, highlighting the channeling of resources to trade, construction, home purchases, and household consumption. Likewise, the pace of expansion of the broader monetary aggregates was around that of nominal gross domestic product (GDP) growth.

In reference to the external sector, in January-September 2024, total exports reached US$10,452.4 million, for an inter-annual variation of 6.1%. This was driven by foreign sales from free trade zones, which grew 7.5%, reaching an all-time high of US$6,404.1 million. Likewise, domestic exports reached US$4,048.3 million, an increase of 4.1% over the same period of the previous year.

On the other hand, remittances received in January-September 2024 amounted to US$8,000 million, an increase of 5.3% compared to the same period of the previous year. Remittances, together with income from foreign direct investment, exports, and tourism, contributed to the relative stability of the exchange rate, with a cumulative depreciation of the peso of only 3.3%.

Likewise, at the end of September, international reserves were US$14,474.8 million, equivalent to 5.5 months of imports and 11.6% of GDP, above the metrics the International Monetary Fund (IMF) recommended.

During his speech, Valdez Albizu recalled that the monthly indicator of economic activity (IMAE) registered an inter-annual growth of 5.6% in August of this year, accumulating an expansion of 5.1% from January to August 2024. This result places the country as the fastest-growing economy in Latin America to date.

The sectors that drove growth in the January-August period were free zones (6.6 %) and construction (4.9 %), the latter having a significant multiplier effect on other economic sectors. Likewise, the services sector expanded 5.4 % year-on-year, supported mainly by financial services (8.1 %), hotels, bars and restaurants (7.1 %), transportation and storage (5.9 %), real estate and rental activities (5.8 %) and communications (5.3 %).

The Governor emphasized that as the institutional manager of the payment interconnection system of the countries that make up the Central American Monetary Council, the Central Bank has played a key role in facilitating our payment platform for transferring funds among these nations. As of September 30, 2023, the platform had increased by 368%.

Another relevant fact expressed by Valdez Albizu is that there are currently 5,620 banking sub-agents operating throughout the national territory, mobilizing an amount exceeding RD$ 33 billion.

Tourism and banking growth

Valdez Albizu affirmed that tourism has become the backbone of economic growth. Its dynamism is reflected in a diversified range of services and the growing external demand for the country’s tourist attractions.

He expressed that during the first eight months of the year, air arrivals amounted to 6.0 million tourists, which added to 1.8 million cruise ship passengers, yielding a grand total of 7.8 million visitors. In this period, the activity of hotels, bars, and restaurants grew 7.1 %, being the second segment of the services sector that generated the highest added value, after financial services, which grew 8.1 %.

Assets of the financial intermediaries sector

As of September 2024, these grew 10.6 %, driven by the increase in private credit in local currency, revealed the Governor of the BCRD). In his speech, the Governor acknowledged the role of the financial sector in supporting private productive activity. He said it performs well in terms of liquidity, profitability, and solvency levels.

He indicated that the loan portfolio delinquency rate reached 1.4%, while the allowance coverage for past-due loans was over 100%, evidencing a low-risk level. He also said that the system’s solvency stood at 17.7% in July 2024, well above the 10% required by regulations. As of September, the return on equity (ROE) was 24.2%, and the return on assets (ROA) was 2.9%.

Valdéz Albizu stated that between January and September 2024 alone, an average of 2.6 million electronic payment transactions were recorded daily, which represents a 20% increase compared to the same period of 2023.