Economy DR closes 2021 with growth of 12.3%

The Central Bank reported that according to the preliminary results of economic activity during December and at the end of 2021, the real Gross Domestic Product (GDP) of the Dominican Republic reached a notable year-on-year growth of 12.3%.

When comparing the behavior of the Dominican Republic in 2021 with the latest projections of the Gross Domestic Product (GDP) published by the International Monetary Fund (IMF) for the Latin American region, this result places the country as the one with the best performance in terms of relative to pre-pandemic levels, says

GDP growth stood at 4.7% in 2021 compared to 2019, reflecting a real reactivation of the Dominican economy instead of a statistical rebound, contrary to the case of many Latin American economies

The significant acceleration of capital spending by the Government in the last quarter of the year stands out, which was decisive in achieving a result higher than the official projections for the end of last year.

Sectors contributed

The sectors that registered the most significant increases in their real value added in 2021, compared to 2020, were hotels, bars and restaurants (39.5%); construction (23.4%); free zone manufacturing (20.3%); transportation and storage (12.9%); trade (12.9%); local manufacturing (10.6%); other service activities (6.4%); and energy and water (6.0%).

In its report, the BC explains that at the end of 2021, construction was driven by private investment in important residential real estate projects, the expansion of installed tourism capacity, as well as the execution with public capital of initiatives for the reconstruction and maintenance of land communication routes and urban improvement.

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In particular, the report adds, “the positive impact of the Government’s efforts to encourage the growth of public investment in the last months of last year 2021 is highlighted once again, as well as to improve the collection of tax revenues to finance the execution of public spending on infrastructure, health and education, among others”. The significant annualized increase of 33% in fiscal revenues at the end of December 2021, equivalent to more than RD$205.5 billion and some RD$88.5 billion, also stands out.

IMAE of December

The Monthly Indicator of Economic Activity (IMAE) for December 2021 increased 10.6% compared to the same month of the previous year. In this regard, the BC highlights that monetary and fiscal measures were implemented to mitigate the economic impact of the health crisis, and that they were crucial for the recovery of the economy. In addition, the broad monetary stimulus plan put in place since the start of the pandemic of some RD$215,000 million, channeled through financial intermediaries to the productive sectors, especially MSMEs and households.

The monetary measures have benefited more than 92,000 credit users and encouraged loans to the private sector in national currency by 11% as of December 31, 2021.

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The monetary measures have benefited more than 92,000 credit users and encouraged loans to the private sector in national currency by 11% as of December 31, 2021.

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