Inflation was 0.37% in January 2025, but growth was also relatively sluggish. The Central Bank reported a 2.2% year-over-year growth in January 2025. This growth, measured by the Monthly Indicator of Economic Activity (IMAE), indicates a moderation in domestic demand, particularly in the investment sector, influenced by a slowdown in construction.
The Central Bank reports that the global economic context remains challenging, with restrictive financial conditions, high international interest rates, geopolitical tensions, and changes in US trade policy contributing to a stronger US dollar.
The Central Bank reported that the key factors influencing growth were variations in the construction and mining sectors.
The construction industry faced a 7.3% year-over-year decline in January, attributed to persistently high real interest rates in the Dominican economy, which are influenced by the restrictive monetary policy of the United States. This has led to adjustments in construction project timelines, with private sector investments proceeding more gradually. Additionally, government capital expenditure remained below historical averages.
Despite high international gold prices, the mining sector contracted by 1.8%. This is primarily due to a slower-than-expected implementation of a redevelopment plan at the country’s main mining site, aimed at extending its operational lifespan. Local community conflicts surrounding the mining operations have also contributed to the slowdown of this sector.
The tourism sector’s growth rate has moderated, with a 1.2% year-over-year increase in January. This reflects a decrease in non-resident foreign arrivals, particularly from the United States and Canada, which are the Dominican Republic’s primary sources of tourists. However, the hotel, bar and restaurant sector saw a 5.5% increase.
The agricultural sector, nevertheless, saw a 4.7% increase, driven by higher production of various crops and livestock.
Free zone manufacturing grew by 3.9%, and local manufacturing increased by 3.2%.
The service sector as a whole expanded by 3.1%, with notable growth in financial services (8.1%), hotels, bars, and restaurants (5.5%), transportation and storage (4.5%), and communications (4.4%).
The financial intermediation sector showed a strong increase of 8.1%
The commerce sector increased by 2.4%
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Central Bank
Central Bank
6 March 2025