Dominican Republic Economy 2022

[NALs]

The Central Bank of the Dominican Republic on January 31, 2023 published a resumed report of the Dominican economy in 2022.

In essence:

• 2022 Economic Growth: 4.9%
• Nominal GDP: US$114 billion
• Formal and Informal Employees: 4.77 million
• Open Unemployment: 4.8%
• Inflation: 7.83%
• International Reserves: US$14.4 billion or 12.8% of GDP
• Foreign Hard Currency: US$39 billion
• Export Growth: 10.5%
• Tourism: US$8.4 billion
• Remittances: US$9.9 billion
• Direct Foreign Investments: US$3.8 billion
• Dominican Peso: appreciation of 2%.

The tables and graphs shown (in the order they appear).

Growth rates of each sector of the economy​

Agriculture - Mining - Local Manufacturing - Free Trade Zones Manufacturing - Construction - Services​

Within Services: Energy and Water - Commerce - Hotels, Bars, and Restaurants - Transportation - Communication - Finance - Real Estate Activities and Rent - Education - Health - Other Services - Government​

​

Comparing 2022 DR unemployment rate with the 2022 unemployment rates of other Latin American countries​

PAN: Panama - BOL: Bolivia - ECU: Ecuador - BRA: Brazil - SLV: El Salvador - MEX: Mexico - DOM: Dominican Republic - CRI: Costa Rica - PRY: Paraguay - URY: Uruguay - PER: Peru - GTM: Guatemala - HND: Honduras - NIC: Nicaragua - CHL: Chile - COL: Colombia - ARG: Argentina - VEN: Venezuela​

​

Dominican Gross International Reserves​

From 2000 to 2022.​

 

[playacaribe2]

Some economic good numbers, some not so good and one important one missing.

The good can be seen in tourism, remittances, export growth.

The not so good, or better put unreliable/manipulated can be seen in the unemployment rate and inflation.

Full employment is generally characterized by 5% or less. There is no way no how the DR is at anywhere near full employment at the unrealistic 4.77% number put out by the Central Bank.

Next, inflation would be much closer to Nicaragua and Colombia but for the huge subsidies the government provided regarding food and especially combustibles.

Finally, any economic report, in order to give a true measure of the underlying economy should include debt. Certainly the debt they incurred to provide just the subsidies is substantial. They omit it from the report….likely because it has tripled….and of course any economy can thrive on borrowed money…..as long as they can pay it back at some point.

Respectfully,
Playacaribe2

 

[NALs]

In today's Listín Diario newspaper.

It basically goes into further detail of what the Central Bank report shown in the OP says regarding the debt.

 

[playacaribe2]

https://www.fitchratings.com/research/sovereigns/fitch-rates-dominican-republic-2033-global-peso-linked-bond-2031-usd-bond-bb-01-02-2023

BB-Stable (BBnegative/stable)...........Not BB as the article in post 3 appears to state.

Either way they are still non-investment grade (junk) bonds with a 13+% coupon rate in pesos or a 7+% coupon rate in dollars. Not attractive enough to entice my money...........not with many top quality stocks around the world yielding 6% in dollars and with little risk of default.

And the purpose of the new bonds is to primarily pay old bondholders......................just debt refinancing.

They will get my attention at BBB- or higher.


Respectfully,
Playacaribe2

 

[NALs]

https://www.fitchratings.com/research/sovereigns/fitch-rates-dominican-republic-2033-global-peso-linked-bond-2031-usd-bond-bb-01-02-2023

BB-Stable (BBnegative/stable)...........Not BB as the article in post 3 appears to state.

Either way they are still non-investment grade (junk) bonds with a 13+% coupon rate in pesos or a 7+% coupon rate in dollars. Not attractive enough to entice my money...........not with many top quality stocks around the world yielding 6% in dollars and with little risk of default.

And the purpose of the new bonds is to primarily pay old bondholders......................just debt refinancing.

They will get my attention at BBB- or higher.


Respectfully,
Playacaribe2

Wrong again. As can be clearly seen in the article, it mentions "BB-" from Fitch and an increase from BB- to BB from S&P. It also mentions that the DR's debt to GDP is below than the average of countries in the BB category.

 

[playacaribe2]

Wrong again. As can be clearly seen in the article, it mentions "BB-" from Fitch and an increase from BB- to BB from S&P. It also mentions that the DR's debt to GDP is below than the average of countries in the BB category.

Yes, it does. I missed the BB- in the second paragraph.

That however does not change either bond ratings agencies opinion that the bonds are non-investment grade....a/k/a junk.

I got it. They have the best debt/gdp ratio as compared to other countries with junk bonds. The best house in a bad neighborhood syndrome.

The danger zone for economies like the DR is 50% debt to gdp...........and they are very close...............which of course is likely one of the reasons why their bonds are non-investment grade/junk.


Respectfully,
Playacaribe2

 

[william webster]

Easy boys.... settle down....... post #6 sums it up pretty well

 

[Kipling333]

I agree with much that Playacaribe has written. The report from Banco Central does not mean much when the country borrows more and more money just to finance a deficit budget . , when about 50% of those employed are in fact government employees and when the regularly quoted unemployment rate is often quoted as 28% . The reason why the peso has appreciated 2% is because it is not on the free market so is manipulated by the Banco Central. If the economy is growing by 4.95 and the inflation is 7.83% , then it is not real growth . The only good thing is that the DR is going better than most Latin Countries . For me, the DR government bonds are not investment grade no matter what figures are given.

 

[aarhus]

Yes, it does. I missed the BB- in the second paragraph.

That however does not change either bond ratings agencies opinion that the bonds are non-investment grade....a/k/a junk.

I got it. They have the best debt/gdp ratio as compared to other countries with junk bonds. The best house in a bad neighborhood syndrome.

The danger zone for economies like the DR is 50% debt to gdp...........and they are very close...............which of course is likely one of the reasons why their bonds are non-investment grade/junk.


Respectfully,
Playacaribe2

“The best house in a bad neighborhood syndrome” Exactly. It’s better than Haiti, Cuba, Venezuela etc

 

[CristoRey]

This is a great example of Dominican math. No way are those inflation and unemployment numbers correct.

 

[NALs]

This is a great example of Dominican math. No way are those inflation and unemployment numbers correct.

The Central Bank has always kept track of open and expanded unemployment (and other types of employments). Many DR1ers are clueless about that (perhaps many until now), including all the expats that have posted in this thread so far. Had they known that I don't think anything regarding unemployment that has been posted here by expats would had been posted. The unemployment numbers are correct, the real issue is that many DR1ers seem to not know what it means.

The inflation figure is also correct, but most people (in general, not just DR1ers) never agree with it because they are basing price changes on a very limited number of goods they buy on a consistent basis, namely foodstuffs and certsin services like phone bills, electric bills, price of gasoline, etc. The actual scope is greater thsn the consumption of most people.

 

[Kipling333]

Goodness , now we have someone preaching how good the collection of information is in the DR and what is needed in the basket of goods and services to produce inflation figures . And everyone who has posted here is clueless. That is everyone is except the writer !!. To think that all my years at University were wasted when I could have learned more in a Dominican forum !!

 

[NALs]

Yes, it does

No it doesn't. That's the reason you quoted Fitch Rating and then claim the article said it gave the DR a BB rating when it didn't and it never said that. The one that did gave the DR a BB rating elevating it from a BB- rating is S&P, you know the one you decided not to quote? The one you clsim to "missed?"

. I missed the BB- in the second paragraph.

The only way to "miss" that is by either not reading the entire article before giving an opinion about it or never truly missed it, just ignored it because it isn't convenient.

I got it. They have the best debt/gdp ratio as compared to other countries with junk bonds. The best house in a bad neighborhood syndrome.
That however does not change either bond ratings agencies opinion that the bonds are non-investment grade....a/k/a junk.

The opinion of both credit ratings is stated in the article too:

"Fitch gives a positive outlook on the reduction of the debt-to-GDP ratio"... "which is below the 54% average for countries in the BB category." (Notice: the DR's debt-to-GDP is lower not just of countries in the BB- category of Fitch, but also the average for countries in Fitch's BB category.)

"Standard & Poors increased the risk level (lower risk) from BB- to BB with a stable perspective, two positive reviews in one year."

The danger zone for economies like the DR is 50% debt to gdp...........and they are very close...............which of course is likely one of the reasons why their bonds are non-investment grade/junk.

It was over 60% during the Covid pandemic. You seem to (conveniently perhaps?) ignore the downward trend and the fact before Covid it was never as high. But I get it, you simply want to further highlight the "non-investment grade/junk" remark. It makes sense why you simply ignored the trend, but Fitch and S&P didn't ignored it.

 

[NALs]

Goodness , now we have someone preaching how good the collection of information is in the DR and what is needed in the basket of goods and services to produce inflation figures . And everyone who has posted here is clueless. That is everyone is except the writer !!. To think that all my years at University were wasted when I could have learned more in a Dominican forum !!

Wonderful education that you have. So great you can't even differentiate between open and expanded unemployment. Illuminate us all with your amazing education. lol

 

[CristoRey]

The Central Bank has always kept track of open and expanded unemployment (and other types of employments). Many DR1ers are clueless about that (perhaps many until now), including all the expats that have posted in this thread so far. Had they known that I don't think anything regarding unemployment that has been posted here by expats would had been posted. The unemployment numbers are correct, the real issue is that many DR1ers seem to not know what it means.

The inflation figure is also correct, but most people (in general, not just DR1ers) never agree with it because they are basing price changes on a very limited number of goods they buy on a consistent basis, namely foodstuffs and certsin services like phone bills, electric bills, price of gasoline, etc. The actual scope is greater thsn the consumption of most people.

What is (a women) unemployment?
Nonsense.
The price of food goods, electricity, gasoline, transportation cost, child care, school supplies, phone services, imports, CPI, ect. are all important tools used when determining real inflation numbers and to suggest they are smaller in scope when it comes to the big picture is an inaccurate, misleading and false statement.
Those of us who live here know better.

 

[playacaribe2]

No it doesn't. That's the reason you quoted Fitch Rating and then claim the article said it gave the DR a BB rating when it didn't and it never said that. The one that did gave the DR a BB rating elevating it from a BB- rating is S&P, you know the one you decided not to quote? The one you clsim to "missed?"


The only way to "miss" that is by either not reading the entire article before giving an opinion about it or never truly missed it, just ignored it because it isn't convenient.

As I said above........yes it does (say that). I missed that and acknowledged same...........and I ignored nothing.......

The opinion of both credit ratings is stated in the article too:

"Fitch gives a positive outlook on the reduction of the debt-to-GDP ratio"... "which is below the 54% average for countries in the BB category." (Notice: the DR's debt-to-GDP is lower not just of countries in the BB- category of Fitch, but also the average for countries in Fitch's BB category.)

The ratings are one and the same.....................non investment grade a/k/a junk...............whether called BB by one or BB- or Ba3 by the others. Perhaps you should take a close look at the agencies ratings systems.

"Standard & Poors increased the risk level (lower risk) from BB- to BB with a stable perspective, two positive reviews in one year."


It was over 60% during the Covid pandemic. You seem to (conveniently perhaps?) ignore the downward trend and the fact before Covid it was never as high. But I get it, you simply want to further highlight the "non-investment grade/junk" remark. It makes sense why you simply ignored the trend, but Fitch and S&P didn't ignored it.

Nothing special here either.

Conveniently ignore the downward trend?

You seem to forget that trend (debt to gdp) for most countries has been downward since the Covid pandemic peak. The DR is hardly special in that regard. In most cases debt did not fall..................rather it was gdp that rose.......giving rise to better ratios.

What will be special is if/when their bonds/debt are raised to BBB or higher (investment grade). Then the government/economy will really have elevated its game.....................

Additionally, the ratings agencies are only as accurate as the numbers the government provides.....................and that is in part where the problem lies. Some of us still remember the shadow banking system that sent the country into technical default................not that long ago................requiring an IMF bailout.

So forgive some of us who refuse to see the inflation numbers or the unemployment numbers put out as accurate. They may be official, but many hardly believe them as accurate.



Respectfully,
Playacaribe2

 

[NALs]

What is (a women) unemployment?
Nonsense.
The price of food goods, electricity, gasoline, transportation cost, child care, school supplies, phone services, imports, CPI, ect. are all important tools used when determining real inflation numbers and to suggest they are smaller in scope when it comes to the big picture is an inaccurate, misleading and false statement.
Those of us who live here know better.

Right, a bunch of expats (which includes runaways to avoid arrest for some crime committed in their country) in some internet forum know better than actual professionals. Go somewhere else with the nonesense.

 

[NALs]

As I said above........yes it does (say that). I missed that and acknowledged same...........and I ignored nothing.......

Right, you missed what is in the second paragraph of an article. There is only one way to miss it.

The ratings are one and the same.....................non investment grade a/k/a junk...............whether called BB by one or BB- or Ba3 by the others. Perhaps you should take a close look at the agencies ratings systems.

They are not.

Conveniently ignore the downward trend?

There is no "downward trend."

You seem to forget that trend (debt to gdp) for most countries has been downward since the Covid pandemic peak. The DR is hardly special in that regard. In most cases debt did not fall..................rather it was gdp that rose.......giving rise to better ratios.

You seem to forget that one of the first things professors say in economic classes is "no country is expected to pay back their debt." Ever wonder why the total debt of every country only increases every year? Now, how is it that you don't know that? You seem to be clueless that the most important part is debt-to-GDP ratio. Don't worry, I'll wait for your explanation of why you seem to be clueless about this.

What will be special is if/when their bonds/debt are raised to BBB or higher (investment grade). Then the government/economy will really have elevated its game.....................

Certainly, but you seem to believe there is a "downtrend" when in fact the opposite is true. That's why qualifications improve and not the other way around.

Additionally, the ratings agencies are only as accurate as the numbers the government provides.....................and that is in part where the problem lies. Some of us still remember the shadow banking system that sent the country into technical default................not that long ago................requiring an IMF bailout.

lol That was never an issue of accuracy of the government numbers at any given time. If it was, the IMF would had never get involved. Another one where you appear to be clueless about.

So forgive some of us who refuse to see the inflation numbers or the unemployment numbers put out as accurate.

Base on what exactly?

They may be official, but many hardly believe them as accurate.
Respectfully,
Playacaribe2

Right…

 

[Kipling333]

I must say that I find the language used by NAL rather offensive, even by standards onDR1. Anyone who has lived in the DR for a decent period of time has almost certainly built up a large amount of sceptisism when it comes to figures or statements or laws emanating from the Government. CristoRey and Playacaribe2 have simply expressed this natural sceptisism in their comments. To call them clueless, is not a decent way of replying.
As light relief. When I did my masters at LSE more than 50 years ago, it was the very early years of econometrics and applied econometrics or whatever name they have these days and we had no computers but used punched cards that always got a jam and so we came up with ridiculous conclusions. We were a very happy group from various countries all trying to improve social conditions in various countries by economic means. Of course it does not matter what computer model is used the results and the conclusions are only as good as the information that is fed into the programme. I think the other point is that although the computer models these days probably lead to better decisions being made ,there is often a lag and this means that results are for the past , maybe many months in the past and the real situation has since changed...it never helps to be dogmatic!

 

[playacaribe2]

Right, you missed what is in the second paragraph of an article. There is only one way to miss it.


They are not.


There is no "downward trend."


You seem to forget that one of the first things professors say in economic classes is "no country is expected to pay back their debt." Ever wonder why the total debt of every country only increases every year? Now, how is it that you don't know that? You seem to be clueless that the most important part is debt-to-GDP ratio. Don't worry, I'll wait for your explanation of why you seem to be clueless about this.


Certainly, but you seem to believe there is a "downtrend" when in fact the opposite is true. That's why qualifications improve and not the other way around.


lol That was never an issue of accuracy of the government numbers at any given time. If it was, the IMF would had never get involved. Another one where you appear to be clueless about.


Base on what exactly?


Right…

My comments stand.

And yes debt does decline......even in the DR.............if you believe those government numbers.

Your delving into the personal within this thread is unbecoming of a Moderator.



Respectfully,
Playacaribe2