The Ministry of Economy, Planning and Development reports that growth projections have been revised upwards for 2022, due to the good performance of economic activity in recent months.
The Ministry of Economy reports an expansion in real terms of the Gross Domestic Product (GDP) between 5.0% and 5.5% is projected. Expectations are the year will end with 5.2% growth. Yet, growth for 2023 will be less, as forecast by Ministry of Economy specialists.
The Ministry of Economy issued the report “Macroeconomic Panorama 2022-2026” that focuses on the strong recovery of the tourism sector, which has registered unprecedented passenger flows during the year, and the notable impact of other goods and services exports, and rising remittances are making the difference.
The report highlights that nevertheless the high levels of global uncertainty condition the economic outlook for 2023. The country is subject to effects of the global financial restrictions and the expected economic slowdown of its main trading partners. In this context, it indicates that the projections for next year are revised downward, forecasting a growth of 4.5%.
According to the report, domestic inflation is expected to close this 2022 at 7.2%, given the temporary postponement of the plan to dismantle the electricity subsidy, the subsidies to domestic fuels and the timely implementation of monetary policies.
Likewise, average inflation is expected to stand at 8.7% (0.3% lower than the last forecast). According to these forecasts, inflation will continue a process of convergence towards the target range in the first half of 2023 and will be around 4.5% by the end of the year.
According to the Macroeconomic Outlook, the GDP deflator is expected to close 2022 with an annual variation of 10%, guided by higher prices of production inputs, especially construction materials, and then settle at 6% in 2023.
“Given the behavior of prices and the real growth forecast under this scenario, nominal GDP would grow by 15.8% in 2022 and 10.8% in 2023,” the report highlights.
It adds that, as a result of greater inflows of foreign currency, due to the recovery of the tourism sector and a greater dynamism of the export sector, an appreciating trend of the exchange rate continued to be observed. The exchange rate is expected to close at 55.15 pesos per US dollar, a reduction of RD$0.10 with respect to the August 2022 forecast and an appreciation rate of 3.7% compared to the 2021 average.
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Presidency
16 November 2022