Dominican exports stumble in first half, as peso slumps

Santo Domingo.- Exports of goods from theDominican Republic during the first six months posted bilateral depreciationsagainst the dollar and a negative annual variation rate of 0.2%, the lowestrate among Central American countries.

A recent report by the Inter-AmericanDevelopment Bank’s (IDB) Trade and Integration Monitor 2016 shows that the country’sstrength in foreign trade is services, which account for as much as 50% of total exports. The line reflects anincrease rate of 7.4% in 2015.

The study says that a contractive dynamic wasgenerated throughout the region during 2015 that affected the pace of exportsand has continued in the first months of 2016, although with less intensity.

It points out that in terms of the type ofproduct, the 14.8% decline of aggregate exports in Latin America in 2015 wasthe result of contractions in virtually all items, with the strongest influencebeing primary products with 12 percentage points, manufactures of primaryorigin with approximately 2.1, and 0.7 manufactures of industrial origin.

The report also notes that exchange rate variationshave produced significant variations in the competitiveness of countries in theregion. It indicates that estimates of the elasticity of exports at the realexchange rate show that, although the effect has declined in recent years,depreciations could spur the growth of foreign trade, particularly manufacturing.

However, in the case of intraregional flows,the current configuration of real exchange rates doesn’t favor the prospectsfor expansion and diversification of exports.

It further notes that exchange ratevolatility poses an additional risk in the current context of macroeconomicuncertainty.