Dominican economy expands by 7.8% in April 2024

Santo Domingo.- The Central Bank of the Dominican Republic (BCRD), committed to transparency and timely data dissemination, reports the preliminary results of economic activity through April 2024.

The Dominican economy registered a remarkable year-on-year expansion of 7.8% in April 2024, accumulating an average growth of 5.1% in the January-April period of this year. This April year-on-year growth is the highest in the last twenty-eight months, and stands out as the month with the best performance in the first four months of 2024.

It is important to note that the results of March 2024 were influenced by the Holy Week holiday and lower economic growth in the United States, our main trading partner.

The notable performance of the economy is largely due to the liquidity expansion program implemented by the BCRD since May 2023. This program has created favorable monetary and financial conditions, facilitating the channeling of loans for RD$196 billion to productive sectors, MSMEs, and households at interest rates not exceeding 9% per year.

Thanks to these measures, private credit in domestic currency expanded by 21.3% year-on-year in April 2024, equivalent to an additional RD$298,561.1 million. This credit dynamism, together with the execution of capital expenditure by the Government, has been crucial for economic growth.

The recent performance of the Dominican economy is also in line with the projections of international organizations, which position the country as one of the fastest-growing economies in the region for 2024. The International Monetary Fund (IMF) projects growth of 5.4%, the World Bank 5.1%, and the Economic Commission for Latin America and the Caribbean (ECLAC) 4.5%.

In terms of sectors, hotels, bars, and restaurants stand out with an average growth of 9.5% in the first four months of the year, financial services (7.1%), construction (6.4%), real estate activities (6.1%), free zones (6.0%), energy and water (5.2%), agriculture (3.9%), commerce (3.1%), and local manufacturing (2.8%).

Labor market

The National Continuous Household Labor Survey (ENCFT) for the first quarter of 2024 shows that the total number of employed persons reached 4,941,183 workers, reflecting a net creation of 172,443 jobs compared to January-March 2023, representing a growth of 3.6%. Job creation was concentrated in formal employment, with an increase of 130,189 people, while total informality grew by an additional 42,254 employed persons, reducing the informality rate from 56.7% to 55.6%.

The open unemployment rate stood at 5.1% in January-March 2024, a figure similar to that of the same period of the previous year. The average unemployment rate for the last four quarters remained stable at 5.3%.

Outlook

The results obtained augur a favorable performance of the Dominican economy throughout 2024, with a growth projection of 5%, remaining within the potential rate and being one of the highest in Latin America. Year-on-year inflation is currently at 3.03%, within the target range of 4% ± 1%, with core inflation at 3.99%.