The Economist, .. Dominican Republic economy: Whopping growth
COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT
Dominican Republic economy: Whopping growth
The economy of the Dominican Republic is expanding at double-digit rates, according to the latest figures from the country’s Central Bank. This is an impressive turnaround from the banking-sector collapse and economic recession of 2003-04. However, the country’s lack of competitiveness, institutional weaknesses, a persistent electricity crisis and a slowdown in the US economy are likely to act as brakes on Dominican growth prospects going forward.
The Central Bank governor, Hector Valdez Albizu, has revealed that GDP grew by 11.7% in the first half of 2005. For full-year 2006, he forecasts growth of 9.3% (the same rate of growth as in 2005). This is substantially higher than the IMF’s most recent estimate for the country of 5.5% for the year (which was published before the latest data was published). In any case, the performance year to date places the Dominican Republic in the ranks of some of the fastest-growing economies in the world, such as China. Within Latin America, only Argentina is growing at a pace close to this rate.
Leading growth sectors in the first half were construction (up 32.6%), communications (28%), agriculture (19.6%), mining (10.3%), local manufacturing (78.6%), trade (10.3%) and finance and insurance (8.9%). Tourism grew by a more moderate 6.8%, while the free-zone sector, which manufactures for export, shrank by 8.1%.
COUNTRY BRIEFING
FROM THE ECONOMIST INTELLIGENCE UNIT
Dominican Republic economy: Whopping growth
The economy of the Dominican Republic is expanding at double-digit rates, according to the latest figures from the country’s Central Bank. This is an impressive turnaround from the banking-sector collapse and economic recession of 2003-04. However, the country’s lack of competitiveness, institutional weaknesses, a persistent electricity crisis and a slowdown in the US economy are likely to act as brakes on Dominican growth prospects going forward.
The Central Bank governor, Hector Valdez Albizu, has revealed that GDP grew by 11.7% in the first half of 2005. For full-year 2006, he forecasts growth of 9.3% (the same rate of growth as in 2005). This is substantially higher than the IMF’s most recent estimate for the country of 5.5% for the year (which was published before the latest data was published). In any case, the performance year to date places the Dominican Republic in the ranks of some of the fastest-growing economies in the world, such as China. Within Latin America, only Argentina is growing at a pace close to this rate.
Leading growth sectors in the first half were construction (up 32.6%), communications (28%), agriculture (19.6%), mining (10.3%), local manufacturing (78.6%), trade (10.3%) and finance and insurance (8.9%). Tourism grew by a more moderate 6.8%, while the free-zone sector, which manufactures for export, shrank by 8.1%.
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