Santo Domingo.- The Central Bank of the Dominican Republic (BCRD) has recently shared the preliminary results of the Dominican economy as of October 2023, emphasizing its commitment to transparency and the timely sharing of data. The report indicates a positive trend in several key areas.
The Monthly Indicator of Economic Activity (IMAE) showed a significant interannual expansion of 3.6% in October 2023, the highest monthly rate of the current year, following a growth of 2.6% in the third quarter. This growth suggests that the Dominican economy is on a solid path of recovery and is expected to reach its potential growth rate by 2024.
Sector-specific growth was notable in hotels, bars, and restaurants with a 9.0% increase, followed by financial services at 6.4%, construction at 4.7%, agriculture at 4.1%, free zone manufacturing at 3.4%, commerce at 2.8%, and local manufacturing at 1.5%. The construction sector, in particular, demonstrated positive growth for the fourth consecutive month, reflecting the effectiveness of liquidity provision measures and increased public capital spending. This growth also indicates a stabilization in the prices of inputs used in construction activities.
From a monetary policy perspective, the BCRD’s measures resulted in significant loan disbursements of about RD$158 billion at rates not exceeding 9.0% annually. The reduction of 125 points in the monetary policy rate led to a decrease in the average loan interest rates by approximately 200 basis points.
The tourism sector, particularly hotels, bars, and restaurants, expanded by 10.8% from January to October 2023, driven largely by a record number of 6,554,589 air tourists and 1,696,711 cruise passengers during this period. The total visitor count is expected to exceed 10 million by the end of 2023, contributing over US$10 billion in foreign exchange earnings.
Financial intermediation activity grew by 6.6%, influenced by a 19.3% year-on-year expansion in private sector credit. The agriculture sector also saw a growth of 3.9%, boosted by the increase in production of key national consumption items and supported by government initiatives.
In terms of inflation, it is projected to remain within the target range of 4.0% ± 1.0% in the monetary policy horizon. This outlook underscores the strength of the macroeconomic fundamentals and the resilience of the productive sectors of the Dominican economy, positioning it well for continued economic reactivation.