The Central Bank reported that data from the Monthly Economic Activity Indicator (IMAE) reveals that from January to April 2020 the economic declined 7.5%. This is the result of inter-annual growth of 4.7% in January, 5.3% in February and then -9.4% in March and -29.8% in April 2020. The tourism industry has practically shut down, with the closing of borders by air, sea and land. Night life is inexistent due to the curfew. There are still limitations in public transport, and general prevention measures continue in place to reduce the spread of the coronavirus.
Credit to the private sector in local currency increased by RD$124 billion between May 2019 and May 2020, equivalent to a 14.0% year-on-year growth.
The Central Bank also reports that its active participation in the foreign exchange market with interventions that exceed US$2.25 billion have served to mitigate what it calls “the transitory mismatch in the usual availability of foreign currency, contributing to the relative stability of the exchange rate.”
The Central Bank on the 29.8% contraction in April says: “It should be noted that the adverse impact on growth recorded in the month of April is expected to be the most critical point of the current crisis, as has been the synchronized experience in most economies of the world, mainly due to the confinement measures to the pandemic previously mentioned.”
The activities that have been most affected in terms of real added value during the January-April 2020 period are Hotels, Bars and Restaurants (-34.1%), Construction (-24.5%), Mining (-11.4%), Other Services (-9.7%), Transportation and Warehousing (-9.6%), Free Trade Zones (-8.8%) and Local Manufacturing (-5.2%). It is worth highlighting that in spite of the restrictions implemented due to the COVID-19, some economic sectors continued to show a positive performance, such as: Health (12.4%), Financial Services (9.8%), Agriculture and Livestock (5.2%), Real Estate Activities (4.9%), Communications (4.8%) and Energy and Water (3.5%).
The Central Bank forecasts that the Dominican economy will experience a “V” shape recovery, returning in the short term to the average expansion levels experienced prior to the implementation of the measures to contain the spread of the virus, which would allow it to close the year around a neutral growth.
The Central Banks says that it bases the forecast on the strong macroeconomic fundamentals of the Dominican economy, as well as its proven resilience to successfully overcome adverse external and internal shocks.
The Central Bank remarks that the resilience of the Dominican economy is possible to the diversified composition of its productive apparatus and the linkages between economic activities that generate a multiplier effect on the economy.
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Central Bank
9 June 2020