The government lowers the projection of growth of the economy in 2023 from 4 to 3%

Santo Domingo.- The Dominican government has once again revised its economic growth projection for 2023, reflecting increased uncertainty both internationally and domestically. The initial estimate of 4.25% growth in March was later lowered to 4% in June, and further reduced to 3% in August, according to the Ministry of Economy’s Macroeconomic Panorama 2023-2027 report.

While economic activity saw a year-on-year growth of 2.9% in July 2023, the cumulative growth for the first seven months of the year was only 1.4%, compared to 5.5% in July of the previous year. The Ministry of Economy attributes the expansion registered until July to improvements in local manufacturing, construction, commerce, and transport, possibly influenced by liquidity provisions and reductions in the monetary policy rate implemented by the Central Bank.

Looking ahead to 2024, the economic outlook appears more positive, albeit with a narrower range. The projected real gross domestic product (GDP) expansion is anticipated to be between 4.50% and 5.00%, with a central projection of 4.75%. This represents a 0.25 percentage point reduction from the previous forecast.

In terms of inflation, projections indicate a year-on-year rate of 4.0% for 2023, with an average of 4.75%. For 2024, both the closing rate and average inflation are expected to be at 4.00%, falling within the outlined target range.

The average exchange rate for financial entities is predicted to end in 2023 at 56.60 pesos per dollar, marking a 0.45 peso increase from the June forecast. The following year, the average rate is expected to rise to 60.25 pesos per dollar.

Despite economic challenges, the consensus among international organizations is that the Dominican Republic will see growth of 3.9% in 2023 and 4.2% in 2024, making it one of the leading performers in the region. Projections for 2023-2025 are aligned between the Ministry of Economy, the Central Bank of the Dominican Republic, and the Ministry of Finance.