The Central Bank forecasts another good year in high remittance flows from Dominicans living abroad. The Central Bank estimates that remittance flows will reach close to US$10 billion by the end of 2022.
The Central Bank reports that between January and April 2022, remittances received reached US$3.2 billion. The amount is US$877.7 million more than the remittances received in the pre-pandemic first four months of 2019, and a time when the United States did not yet have the aid schemes that were implemented after March 2020 and ended in September 2021.
The BCRD notes that, particularly in the month of April 2022, remittances totaled US$809.8 million. The BCRD says monthly remittance flows now fluctuate around US$800 million. This compares to the US$489 million monthly average in pre-pandemic years (2015-2019).
The BCRD says the high job rate in the United States has positively influenced the behavior of remittances. 85.2% of the flows in April came from the United States. The US economy created 428 thousand jobs during that month, keeping the unemployment rate at 3.6% in April 2022. In particular, Hispanic unemployment in the US fell from 4.2% in March to 4.1% in April.
The BCRD also highlights the reception of remittances from other countries, such as Spain. More than 186 thousand Dominicans live in Europe, according to a study by the Institute of Dominicans Abroad (INDEX). Those living in Spain sent back 6% of the total remittances. There are also large pockets of Dominican migration living in Haiti (1.3%) and Italy (0.8%). The rest of the remittances received are divided among countries such as Switzerland, Canada and Panama, among others.
Residents in metropolitan areas receive more than half (56.5%) of the remittances sent to the country by electronic transfers. The remittances are mostly sent to the National District (33.1%), followed by Santiago (14.5%) and Santo Domingo province (9%).
The BCRD is bullish overall on the trend for continued good performance of hard currency generators, including the remittances, exports, foreign direct investment, and tourism. The greater flow of foreign exchange into the country will help maintain the relative stability of the exchange rate currently observed. The BCRD concludes that together with the country’s strong macroeconomic fundamentals, this indicates that the Dominican Republic possesses favorable conditions to accommodate the adverse shocks of the international environment.
International reserves at the end of April 2022 stood at around US$14.4 billion, representing 13.5% of GDP and equivalent to 5.9 months of imports. These metrics exceed the levels recommended by the IMF, contributing to the Dominican Republic maintaining a favorable external position, projecting an inflow of remittances for the end of 2002 of close to US$10 billion and a current account deficit of around 3.0% of GDP.
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Central Bank
18 May 2022