Central Bank: economy continues trend towards recovery

The Central Bank of the Dominican Republic (BCRD) reported that the Monthly Economic Activity Indicator (IMAE) corresponding to October 2020 shows a year-on-year variation of -4.3%, reflecting an improvement of 25.5%, seven times less than the highest point critical of the crisis observed in April (-29.8%).

Likewise, the BCRD projects that the conditions are in place for the economic reactivation process to continue to intensify even more next year, reaching growth that could exceed 6.0% in 2021, above the potential rate, reflecting once again the strong macroeconomic fundamentals and the remarkable resilience of the Dominican private sector to recover from supply and demand shocks, both external and internal.

It explains that this figure of -4.3% in October, combined with the interannual variation rates of the real gross domestic product (GDP) in January-March (0.0%), April-June (-16.9%), and July-September (-7.2% ), places the average growth of the economy in the period January-October 2020 at -7.7%, more favorable than the results of -8.5% and -8.1% accumulated at the end of the second and third quarters of the year, respectively.

He advanced that the trend towards recovery is expected to continue to be accentuated in November and December, with even less negative rates, which would make it possible to project, based on the information available so far, that the Dominican economy would be closing the year 2020 with a real GDP variation around -6.7% / -6.8%.

It indicates that another relevant aspect to highlight is that the weighted average of all economic activities, excluding hotels, bars, and restaurants, exhibits an interannual variation of -0.7% in October.

When analyzing the behavior of the economy in October 2020, it is observed that the economic activities that presented growth rates were: health (13.4%), communications (5.2%), financial services (4.0%), real estate activities (2.7%), construction (2.3%) and free zones (2.0%).

Negative were hotels, bars and restaurants (-48.8%), mining (-23.9%), other services (-10.1%), transportation and storage (-7.3%), education (-6.7%), commerce (-3.1%) , public administration (-2.6%), energy and water (-1.6%), manufacturing (-1.0%) and agriculture (-0.6%).