What will be the total economic impact on the DR from the COVID19 ??

Mm530

Member
Dec 28, 2014
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The US is going to slide into a recession ... ESPECIALLY NYC where most Dominicans reside. The economy is a stand still and will have a ripple effect on the remittance money sent from US.

Dominican economy's MAIN money maker is Tourism. This will be a big dent in MANY pockets ! Lost wages, Sales, Events, Weddings, Tax Revenue, Cruise Revenue, AirBnb Taxes.

Unlike NY or other developed cities , The government has no solid plan to provide an effective " Safety Net" for the hundreds of small business and stores that will close or fail.

Many dominicans I met live literally week by week and a 15 day lockdown will really be destabilizing the country massively.

Also, DR doesnt have an effective or well equipped health care system or infrastructure to deal with any infection clusters of any size....Oh man

As if that werent enough, COVID19 shows no signs of stopping just yet so we dont how long it will take. ......Call it an Open Ended crisis.

We are living history. This will be in all the textbooks. The world will now remember things as Pre or Post Corona
 

TropicalPaul

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Sep 3, 2013
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The US is going to slide into a recession ... ESPECIALLY NYC where most Dominicans reside. The economy is a stand still and will have a ripple effect on the remittance money sent from US.

Dominican economy's MAIN money maker is Tourism. This will be a big dent in MANY pockets ! Lost wages, Sales, Events, Weddings, Tax Revenue, Cruise Revenue, AirBnb Taxes.

Unlike NY or other developed cities , The government has no solid plan to provide an effective " Safety Net" for the hundreds of small business and stores that will close or fail.

Many dominicans I met live literally week by week and a 15 day lockdown will really be destabilizing the country massively.

Also, DR doesnt have an effective or well equipped health care system or infrastructure to deal with any infection clusters of any size....Oh man

As if that werent enough, COVID19 shows no signs of stopping just yet so we dont how long it will take. ......Call it an Open Ended crisis.

We are living history. This will be in all the textbooks. The world will now remember things as Pre or Post Corona
I completely agree with you. The issue for DR is that the tourism sector was already having a rough year, since arrivals from the US were still down after the death scares last year. The failure of Thomas Cook also had a big impact on a lot of resorts. Now this complete shut-down and cancellation of flights is going to cause devastation. Thousands of people being sent home without jobs from Bavaro. Many of these individuals have families in the capital and their wages are sent home. Dominicans are not savers, they tend to spend every cent of their wages as soon as they get them. So there is no safety net, and the government is not offering anything other than to delay tax payments.

The real issue is also for things like crime. DR has always been relatively safe for foreigners. A spike in unemployment will lead to higher crime rates and this is going to have a longer-term impact on foreigners choosing to live in DR. So, unfortunately, we may well see a few more stories of foreigners being attacked in the next few months.
 

etolw

On an extended vacation
Oct 6, 2018
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I completely agree with you. The issue for DR is that the tourism sector was already having a rough year, since arrivals from the US were still down after the death scares last year. The failure of Thomas Cook also had a big impact on a lot of resorts. Now this complete shut-down and cancellation of flights is going to cause devastation. Thousands of people being sent home without jobs from Bavaro. Many of these individuals have families in the capital and their wages are sent home. Dominicans are not savers, they tend to spend every cent of their wages as soon as they get them. So there is no safety net, and the government is not offering anything other than to delay tax payments.

The real issue is also for things like crime. DR has always been relatively safe for foreigners. A spike in unemployment will lead to higher crime rates and this is going to have a longer-term impact on foreigners choosing to live in DR. So, unfortunately, we may well see a few more stories of foreigners being attacked in the next few months.




Relative safe, only tourists areas. I have managed to live outside Sabaneta de Haina, but never felt safe for good reasons

Heck, I have even been attaccked at Playa Cabarete at 5pm
Fortunately now there are fewer tourists to attack
 
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Jan 9, 2004
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The economy of the DR is like a three legged stool.

Remittances from abroad, Free Trade Zone exports and Tourism are each of the three legs.........and all three will be affected.

Remittances will be slowing as global unemployment climbs and Dominicans abroad will be sending less and less money home.

Free Trade Zones will likely be affected as global demand wanes for their products (medical devices being perhaps an exception)

Resorts in Punta Cana are currently shutting down leaving tens of thousands of workers on furlough.

While these are likely shorter term events..........the impact to the economy may well be felt for years to come.

The Banco Central MUST lower its monetary rate (currently 4.5%)..........and it MUST do it soon. As the world's central banks are all lowering rates and taking other measures to stimulate/buffer their economies, the DR seems to be sitting idly by..........preferring to be reactive than pro-active.

So when they do lower, and lower they must..........expect the peso the to depreciate more rapidly than usual. And if the coronavirus crisis continues for some months, the likely landing spot for the peso could be at 60:1......meaning "investments" in peso certificates might not be the prudent thing at the moment.

Finally, if the Banco Central in conjunction with the government also decides to provide other economic stimulus if/when the crisis continues, i.e. quantitative easing, to inject more liquidity into the economy, conversion rates north of 60 could be possible.


Respectfully,
Playacaribe2
 

Ecoman1949

Born to Ride.
Oct 17, 2015
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As we say in Newfoundland, “The arse is right out of her”. The effect on DR tourism will be devastating in the short term. However, sun, sand, and warm weather are a constant draw for North Americans and winter is not going away despite climate change. The DR tourism industry will bounce back. Peace out everyone. Like digesting a bad heavy meal, this too shall pass.
 
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Africaida

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Jun 19, 2009
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As we say in Newfoundland, “The arse is right out of her”. The effect on DR tourism will be devastating in the short term. However, sun, sand, and warm weather are a constant draw for North Americans and winter is not going away despite climate change. The DR tourism industry will bounce back. Peace out everyone. Like digesting a bad heavy meal, this too shall pass.
I share your optimism and I think Tourism worldwide will bounce back. But I also believe, it is going to be a while before many North Americans will be able to travel in the same numbers, because when things get back to normal many North Americans, Europeans will try to recoup the loss in income they have suffered.
 

USA DOC

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Feb 20, 2016
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The US is going to slide into a recession ... ESPECIALLY NYC where most Dominicans reside. The economy is a stand still and will have a ripple effect on the remittance money sent from US.

Dominican economy's MAIN money maker is Tourism. This will be a big dent in MANY pockets ! Lost wages, Sales, Events, Weddings, Tax Revenue, Cruise Revenue, AirBnb Taxes.

Unlike NY or other developed cities , The government has no solid plan to provide an effective " Safety Net" for the hundreds of small business and stores that will close or fail.

Many dominicans I met live literally week by week and a 15 day lockdown will really be destabilizing the country massively.

Also, DR doesnt have an effective or well equipped health care system or infrastructure to deal with any infection clusters of any size....Oh man

As if that werent enough, COVID19 shows no signs of stopping just yet so we dont how long it will take. ......Call it an Open Ended crisis.

We are living history. This will be in all the textbooks. The world will now remember things as Pre or Post Corona
..As I said before. we will have a different world after the virus...
 

Ecoman1949

Born to Ride.
Oct 17, 2015
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I share your optimism and I think Tourism worldwide will bounce back. But I also believe, it is going to be a while before many North Americans will be able to travel in the same numbers, because when things get back to normal many North Americans, Europeans will try to recoup the loss in income they have suffered.
I agree which is why tourist resorts in all countries will probably offer discounted price packages as an incentive for people to travel again. The cruise ship industry will need to offer even more incentives and probably mothball part of their fleet for a while. I don’t like cruises and like them even less now.
 

Ecoman1949

Born to Ride.
Oct 17, 2015
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This too, shall pass.
Not like shyte from a goose. More like shyte from a constipated goose! But it will pass. Whats happening now is merely nature reminding us who is really in charge. It does this to control our level of arrogance towards the spinning blue ball we call home. Hurricanes, earthquakes, and other natural disasters serve the same purpose.
 
Jan 9, 2004
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Likely in response to the economic headwinds being created by the fallout from the coronavirus, the Banco Central has finally announced today that they are lowering the benchmark interest rate by 1% from 4.5% to 3.5%.

https://translate.google.com/translate?hl=en&sl=es&u=https://www.bancentral.gov.do/&prev=search

Normally, they announce interest rate policy changes the last day of the month, but today's lowering is a good start and none too soon........expect more interest rate reductions if/when the economy continues to weaken............and expect the peso to weaken faster than normal as well.


Respectfully,
Playacaribe2
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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Likely in response to the economic headwinds being created by the fallout from the coronavirus, the Banco Central has finally announced today that they are lowering the benchmark interest rate by 1% from 4.5% to 3.5%.

https://translate.google.com/translate?hl=en&sl=es&u=https://www.bancentral.gov.do/&prev=search

Normally, they announce interest rate policy changes the last day of the month, but today's lowering is a good start and none too soon........expect more interest rate reductions if/when the economy continues to weaken............and expect the peso to weaken faster than normal as well.


Respectfully,
Playacaribe2
What do your car dealer clients have to say?

I am wondering about the impact on the price of capital good here, cars, real estate, etc.

I'm a notorious bottom-feeder, stockpile cash and buy at the bottom of markets...
 
Jan 9, 2004
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What do your car dealer clients have to say?

I am wondering about the impact on the price of capital good here, cars, real estate, etc.

I'm a notorious bottom-feeder, stockpile cash and buy at the bottom of markets...
About 50% of their car sales are done in pesos.....which then must be converted to Dollars/Euros to pay for their inventory........so any exchange rate movements in the wrong direction affect their profitability.

And any significant moves can of course be devastating, which is why they follow the exchange rate so closely and react so swiftly when they believe a depreciation of the peso is in the offing. They also know when the supply of dollars is inadequate......in spite of the government claiming otherwise.

The first hint that a rate decline was/is coming for the peso was when the US lowered their interest rates between fed meetings and the second was when the first corona virus case was announced in the DR. It was at that time, I urged them to start buying dollars with their pesos.

The car business there does not operate like it does elsewhere. Except for importers of new vehicles, there is little urgency to sell............even during crisis times..............the '03-'04 banking crisis being the best example. Generally, my clients stop buying, pay their outstanding invoices and wait it out. They are mostly well capitalized with strong asset positions in the US and elsewhere............so they are capable of weathering a storm.

I do not have enough contacts in real estate to make any accurate observations as to how this coronavirus may affect, if at all, real estate pricing.


Respectfully,
Playacaribe2
 

chico bill

Lobotomy Surgeon
May 6, 2016
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With the peso at 54+/- to the US dollar, getting an interest bearing account in pesos at 3.5 % means the peso needs to be at 55.89 in a year to even break even, which is not likely based on this years change. The peso devalued at 6.5% in the past 12 months. If that same devaluation holds the peso will be 57.5 to the dollar in another year.
As a reminder it was 28 to 1 just 2005.
 

USA DOC

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Feb 20, 2016
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What do your car dealer clients have to say?

I am wondering about the impact on the price of capital good here, cars, real estate, etc.

I'm a notorious bottom-feeder, stockpile cash and buy at the bottom of markets...
My Car Dealer friends in the USA tell me new cars were very slow coming in, as production was almost at a halt. many of the parts of a new car come from small suppliers that are not shipping.. Many of the new cars here come from the USA as do the used ones.. a small uncertain supply will not mean low prices.
 

cobraboy

Pro-Bono Demolition Hobbyist
Jul 24, 2004
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My Car Dealer friends in the USA tell me new cars were very slow coming in, as production was almost at a halt. many of the parts of a new car come from small suppliers that are not shipping.. Many of the new cars here come from the USA as do the used ones.. a small uncertain supply will not mean low prices.
Low demand due to thin wallets could also result.
 

NALs

Polls Forum Moderator
Jan 20, 2003
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As if that werent enough, COVID19 shows no signs of stopping just yet so we dont how long it will take. ......Call it an Open Ended crisis.
The idea isn't to stop the virus, because as of yet there is nothing that can be done regarding that. If a vaccine is developed, it will take some time to create the necessary quantity. The goal right now is to slowdown transmission of the virus to not collapse the health system of countries worldwide.

Most people are going to get the virus, the questions are:

Get it now or later?

Will I not have any symptoms, mild, severe or deadly case?

That's really it. There's no way to undo anything once a virus is created in nature or in a lab. Vaccines help the body defenses by injecting some of the virus plus other chemicals and letting the body fight it off, in effect learning how to do it every time it finds the virus in the system. That is the case with every single virus. There's no way to destroy them or undo them.

People that are over 60 years and those with underlying conditions such as hypertension or diabetes have a greater chance of complication from the virus and dying. There is really nothing anyone can do to avoid it, but the infection rate can be slowed down with quarantines, constantly washing hands, keeping social distance, etc.
 
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Ecoman1949

Born to Ride.
Oct 17, 2015
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Hope springs eternal if you go by Trivago. They are showing resort booking available for the month of June, some at discounted prices.