Economy June 19, 2024 | 2:14 pm

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Dominican Republic sees 5% increase in remittances

Santo Domingo.- The Central Bank of the Dominican Republic (BCRD) reported that remittances received between January and May 2024 totaled US$4,382.3 million, marking a 5.0% increase compared to the same period the previous year. This continues the trend of year-on-year growth in remittance flows observed in 2023.

In May alone, US$887.1 million in remittances were received, a 0.7% increase over May 2023. These funds from the diaspora significantly impact consumption, investment, and the financing of the most vulnerable sectors in the country.

The BCRD attributes the behavior of remittances largely to the economic performance of the United States, from which 87.3% of formal remittances in May originated, amounting to US$713.8 million. The U.S. unemployment rate stood at 4.0% in May, slightly up from 3.9% in April 2024, alongside the creation of 272,000 new jobs. The Institute for Supply and Management’s (ISM) non-manufacturing purchasing managers index (PMI) also increased to 53.8 in May from 49.4 in April, signaling an expansion in the service sector where many Dominicans are employed.

In May, remittances also came through formal channels from other countries, including Spain (US$39.4 million, 4.8% of the total), Haiti (1.0%), and Italy (0.7%). Additional countries contributing to remittances included Switzerland, Canada, and Panama.

The distribution of remittances by province in May shows that the National District received 39.2%, followed by Santiago (12.8%) and Santo Domingo (7.9%), meaning that 60.0% of remittances went to metropolitan areas.

Looking at the broader external sector, the BCRD expects foreign exchange earnings to grow favorably in 2024, driven by tourism, foreign direct investment (FDI), exports, and remittances. Estimates suggest that remittances and FDI flows will reach approximately US$10.4 billion and US$4.5 billion, respectively, by the end of the year. These inflows contribute to the relative stability of the exchange rate, with the national currency depreciating by 1.9% by the end of May 2024 compared to the end of 2023.

Furthermore, increased external income flows have helped maintain robust international reserves, which stood at US$13,937.5 million at the end of May, covering about 5.0 months of imports and equivalent to 11.3% of GDP, exceeding IMF-recommended thresholds.

The Central Bank remains committed to monitoring the economic environment and taking necessary measures to mitigate the impacts of international challenges on the Dominican economy, ensuring stability in prices and the exchange market.

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June 19, 2024 3:17 pm

I guess the people in Europe and America will be paying those tax increases.

June 19, 2024 5:38 pm

More money for no services rendered and making things for everyone else more expensive.

Platano Frito
June 22, 2024 10:38 am

If your national currency is going down in value, thats not stability. the banks dont care about your economy and are not held to any real verifications. What about informal remittances?. Who is tracking economic movements using crypto currencies?.