The Central Bank of the Dominican Republic (BCRD) reported a record-breaking US$9.75 billion in remittances received between January and November 2024. This figure surpasses the previous year’s total for the same period by US$540.3 million, representing a 5.9% increase. By year’s end, a record of around US$10.7 billion in remittances is forecast.
The BCRD attributed the surge in remittances to the robust US economy, as 83.1% of the total for November originated from the United States. The low unemployment rate and expanding service sector in the United States, where a large portion of the Dominican diaspora is employed, have contributed significantly to this trend.
While the United States remains the primary source of remittances, other countries like Spain, Italy, and Haiti have also contributed to the overall increase. The distribution of remittances within the Dominican Republic shows a concentration in urban areas, with Santo Domingo and Santiago being the top recipients.
The BCRD highlighted the crucial role of remittances in supporting the Dominican economy, particularly in stimulating consumption, investment, and providing financial support to vulnerable sectors. The influx of foreign exchange from remittances, combined with tourism earnings and foreign direct investment, has helped to maintain the stability of the Dominican peso and bolster the country’s international reserves.
48.76% of the remittances are received in Greater Santo Domingo (National District and Santo Domingo province). Another 12.3% in Santiago.
There is a downside to the flow of cash. Thousands of Dominicans desist from more productive work, relying instead on the cash they receive from relatives abroad.
The Central Bank in its report on the remittances for the first 11 months of the year emphasized its commitment to monitoring the economic landscape and implementing appropriate measures to safeguard the stability of prices and the exchange rate amid a challenging global environment.
Analyzing the recent evolution of the external sector, the Central Bank of the Dominican Republic (BCRD) forecasts a significant inflow of foreign currency by the end of 2024, amounting to over US$43 billion. This includes around US$10.7 billion from the tourism sector and a similar amount from remittances. Additionally, projections for the year-end suggest foreign direct investment (FDI) flows exceeding US$4.5 billion and exports from free zones surpassing US$8.5 billion. These foreign currency inflows help maintain the relative stability of the exchange rate observed currently. As of the end of November 2024, the national currency had depreciated by 3.7% compared to the close of 2023.
The institution highlights that these higher external earnings have also enabled the country to maintain an adequate level of international reserves. As of November 2024, reserves reached US$13.09 billion, covering about five months of imports and equivalent to 10.5% of GDP, exceeding the thresholds recommended by the IMF.
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Central Bank
17 December 2024