The governor of the Central Bank (BCRD) said yesterday that, according to preliminary reports from the Monthly Economic Activity Index (IMAE), it is projected that this year 2021 the Dominican economy will close with a growth of more than 12% of its gross domestic product (GDP).
The official reported, in a virtual press conference, that During November, the IMAE presented an interannual growth of 13.1%, higher than expected and well above the 12.5% reached in the first eleven months of this year and the pre-pandemic levels.
“All conditions are in place for the economy to close with a expansion of more than 12%”, Higher than Latin American countries, he stated.
The sectors that boosted this growthAs Valdez Albizu explained, they were Hotels, Bars and Restaurants with 38.3%, construction with 24.1%, free zone manufacturing with 21.2%, transportation and storage with 13%, commerce 11.8%, local manufacturing 11.1%, other manufactures and services 5.8% and energy and water with 5.3%.
Inflation
Regarding inflationary pressures that are “more persistent” than expected, due to the increase in oil prices, disruptions in global supply chains, freight and container costs, and geopolitical problems that have affected international trade, Valdez Albizu, indicated that As of November, inflation was 7.71% in the country. While the interannual core inflation has been placed at 6.63%.
He said that the Central Bank has adopted a plan on your monetary policy And in an orderly manner, the resources granted during the pandemic to companies and families have begun to return, which are repaying the loans that were granted by financial entities through liquidity facilities.
Interest rate
Regarding the interest rate projections, he also said that to control inflation pressures, the BCRD raised its Monetary Policy Rate by 50 basis points, from 3% to 3.50% annually, a measure that most banks are applying. central.
In this context, he gave an example that countries such as Brazil increased 700 basis points, Paraguay 400 points, Chile 350, Peru 225, Colombia 125, Mexico 125, Uruguay 125, and Costa Rica 50 and in January he considers a similar increase. Also, an interest rate increase is anticipated in the first quarter of next year in the US economy.
The outlook for the economy remains positive, slightly above its potential. “We are on the right track. We are building an economy that had been devastated by a terrible pandemic, “he stressed.
Similarly, He highlighted the behavior of the tourism sector, the great liquidity of the Dominican financial system, the increase in remittances, foreign investment, collections and a lower deficit.
Indicators
Shipping and export
Remittances and total exports continue with significant dynamism, with year-on-year growth as of November 2021 of 11.2% and 21.7%, respectively.
Lower deficit
The current account deficit for 2021 would be 1.9% of GDP, with a flow of remittances that would exceed US $ 10 billion this year.
This deficit would be covered 1.7 times by direct foreign investment flows, which would be around US $ 3 billion at the end of 2021.
Weight is appreciated 2.5%
As of November 30 of this year, the Dominican peso shows an appreciation of 2.5%, contrary to the depreciation observed in the currencies of most Latin American countries.
US $ 12,800 MM in reserves
International reserves are expected to end the year close to US $ 12.8 billion, equivalent to 6.5 months of imports and 13.8% of GDP.
Inflation at 7.71%
Accumulated inflation as of November 2021 was 7.71%.
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