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Economic Overview
Year of National Reactivation
President Leonel Fernandez has declared 2010 as the Year of National Economic Reactivation. Business community is cautiously optimistic. Manuel Diez Cabral, president of the Association of Industries (AIRD) has expressed his hope that 2010 will be a year of moderate growth, economic stability and the start of changing the economic model to one that favors the export of goods and services.

The Central Bank and the Economic Commission for Latin America (ECLAC) forecast a 3.5% increase in the Gross Domestic Product for 2009. This compares to 1.8% average growth for the Caribbean.

Central Bank authorities say that the economy responded well to monetary measures taken in 2009 to reactivate commercial bank lending to the private sector. Monetary authorities reduced the prime rate, bank reserved levels, made changes in restrictive banking prudential norms and liquidity provision levels to stimulate borrowing.

The Central Bank said that the recovery began in the quarter April-June 2009 with a 1.8% growth rate, which increased to 3.4% for the July-September quarter. The Central Bank says that given its solidity and stability of the financial system, Dominican banks were able to respond rapidly to the stimulating measures.

The sectors of the economy that most benefited from these changes were commerce, the real estate market, agriculture, construction, manufacturing and small business loans.

The report states that the level of gross international reserves hovers around US$3.2 billion and net international reserves register at around US$2.8 billion. International liquid reserves also registered at US$1.6 billion.

The balance of payment has also experienced increased strengthening, registering a deficit of -5.25% in 2009, a vast increase compared to the -9.7% increase of the GDP in 2008, for a reduction of 4.5%. This is partly due to a decrease in imports of US$3.73 billion, particularly oil imports which decreased by US$1.72 billion.

The Ministry of Hacienda reports that imports declined 30.3% from January to November. Imports this year are US$15.86 billion, down from US$11.05 billion. National imports were down 27.1%, free zone imports 5.3%, and petroleum imports 52.4%.

The deficit of the current accounts closed the year at US$2.2 billion while foreign direct investment registered US$2.06 billion.

The Center for Exports & Investment (CEI-RD) reports that foreign investments made in 2009 had reached US$1.76 billion as of September. CEI RD forecasts that by year's end, foreign investment should total US$2.1 billion. Eddy Martinez, director of CEI-RD, pointed to investments in the mining, real estate, telecommunications, commerce, industry and energy sectors. He said that investments have come from Canada, Mexico, US, Spain and Switzerland.

CEI-RD statistics show that exports in the DR for the period January-September were down 21.5%. Leading Dominican exports for the Jan-Sept 2009 period were blood transfusion apparatus US$334.58 million, cotton textiles US$188.25 million, handmade cigars US$175.23, disposable medical products US$98.38 million and raw sugar cane US$91.39 million. The DR also exported US$37.51 million in copper.

The Ministry of Hacienda reports that imports declined 30.3% from January to November. Imports this year are US$15.86 billion, down from US$11.05 billion. National imports were down 27.1%, free zone imports 5.3%, and petroleum imports 52.4%.

For official macroeconomic indicators, see the Central Bank web site.

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