At the end of 2020, it is estimated that the Dominican Republic had a saving level that exceeds the Latin American average by 4.9 percentage points, reaching 23% of the Dominican gross domestic product (GDP). Only Nicaragua and Mexico had higher levels of savings over GDP.
The data comes from the report Savings trends in the Dominican Republic: Perspective from the financial system deposits, published by the Superintendency of Banks (SB). This is the first installment of a publication that will be published every six months and that, on this occasion, coincides with the month of savings.
According to the document, the pandemic has caused a considerable economic contraction from which the country was not exempt, but despite the difficulty and the enormous challenge, the national financial system was resilient and responsive, says a statement. of the SB.
“Since the start of the pandemic in March 2020, the financial system registered an increase of RD $276,000 million in savings account deposits. This fact confirms people’s confidence in the national financial system and turns national savings into one of the main engines of economic recovery ”, indicates the publication of the SB.
Savings instruments
When disaggregating the system’s catchments by type of instrument, 43.7% of the total balance is placed in savings accounts, followed by certificates and bonds held by the public and current accounts, whose participation in total fund-raising amounts to 22.4% and 20.0% respectively. While term deposits represent 13.9%.
Public fund-raising continues to be the main source of economic resources for carrying out financial intermediation activities, representing 87% of the financial system’s total liabilities, adding to the month of August 2021 a total of RD $ 2.01 trillion, which in turn It once represents a year-on-year increase of 14.1%, to stand at around 42% of nominal GDP.
Multiple banks represent 89.3% of total deposits (RD $ 1.79 trillion). The rest is distributed in 8.8% of savings and loan associations, 1.6% of savings and credit banks, while credit corporations and public financial intermediation entities have 0.2% and 0.2%, respectively.
When observing the evolution in the composition of deposits in foreign currency, the dominance of the US dollar continues with a 97.9% share, leaving the euro in second place, with 2.1%.
The Eastern and Northern regions were the ones with the highest year-on-year increase as of August 2021, with an expansion of 20.5% and 15.6%, respectively, followed by the Metropolitan area and the South region with growth rates of 13.3% and 10.1% each.
The report identifies households as the main category of depositors in the financial system, with accumulated values in the order of RD $ 1,116 billion (55.6% of the total, as of June), followed by companies with RD $ 471 billion, equivalent to 23.5%.
.