The Central Bank reported yesterday that the monthly indicator of economic activity (IMAE) registered a YoY growth of 4.8% in May and a cumulative variation of 5.6% during the first five months of 2022 when compared to the same period in 2021.
In a note, the monetary and financial authority indicated that the performance shown by the Dominican economy this year reflects its resilience and ability to mitigate the impact of the adverse factors that prevail worldwide.
When analyzing in detail the behavior of the IMAE, the following economic activities stand out due to the increase in their added value during the period January-May 2022: hotels, bars and restaurants (35.0%)other activities of services (10.9%), health (9.4%), transport and storage (8.3%), public administration (8.0%), free zone manufacturing (7.9%), trade (7.2%), financial services (6.5%).
Perspective
Given the uncertainty associated with the international environment and the orientation of the monetary policy of most of the Central Banks towards the normalization of liquidity levels for the stabilization of the inflationary process, the prospects for expansion of the economies have become more conservativerevising downwards projections for world growth from 4.4% to 3.6%.
In the case of Dominican economy, prospects remain favorableforecasting one of the highest GDP growth rates among emerging economies and in the region by the end of 2022, with a variation around its potential, which would be consistent with greater flows of public and private investment in the second half of the year.
Tourism
The Central Bank indicated that it is important to highlight the year-on-year expansion of 35.0% in the added value of the hotels, bars and restaurants activity at the end of May 2022, which basically responds to the 102.2% year-on-year increase in the arrival of non-resident passengers in the first five months of the year.
He argues that this dynamism continued during the month of June when 644,861 tourists arrived in the country, thus achieving 3.5 million visitors in the first semester of 2022, according to preliminary data offered by the Ministry of Tourism, representing approximately US$4,000 million of foreign currency income, which allows us to project that for the entire year more than US$8,000 million would be received for this concept .
“The recovery of tourism has benefited from the implementation of timely policies aimed at promoting the sustainability of this industry by guaranteeing the protection of travelers in the country in the face of the health situation related to COVID-19, as well as by promotional strategies. in the potential issuing markets and renewal of the most attractive destinations in the different provinces of the country to continue strengthening domestic and inbound tourism”, the BC pointed out.
Other driving factors
The Central Bank report explained that the increase in the value added in the activities of commerce (7.2%) and transport and storage (8.3%) is closely linked to the dynamism in productiondistribution and commercialization of agricultural and manufactured goods of local and imported origin, as well as by the notable land flow of passengers.
“These activities together explain approximately 26.4% of the 5.6% year-on-year variation registered by the IMAE for January-May 2022,” the BC stated.
He added that the 7.9% increase in free zones is driven by external demand of the goods produced by the sector, which at the end of May 2022 reached an accumulated amount of US$3,192.1 million, for a year-on-year growth of 12.7%.
Regarding local manufacturing, this activity registered an average increase of 4.7%.
6.5% Financial activity. The activity of financial intermediation exhibited an interannual variation of 6.5% in January-May, affecting the interannual expansion of 14.2% of the credit granted to the private sector.
3.2% Construction.
The activity of the construction sector increased 3.2% in January-May 2022 in year-on-year terms, a result that was influenced by the considerable increase in the price of inputs.