The Governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, announced that “according to the latest BCRD estimates, inflation would enter the target range of 4% ± 1% at the end of this same May, sooner than It planned”.
The governor expressed that “this achievement would grant the necessary spaces for the Central Bank to adopt timely measures that contribute to relaunching growth during the rest of the year, preserving macroeconomic stability.”
When giving the conference “Economic news & perspectives 2023”, during the annual lunch organized in Santiago de los Caballeros by the Association of Industrialists of the Northern Region, Inc. (AIREN), Valdez Albizu highlighted the dynamism of foreign exchange-generating activities, and pointed out that “tourism is being the spearhead of the economy, generating income of more than US$8.4 billion in 2022 with the arrival of 8.5 million non-resident visitors, of which 7.2 million arrived by air and 1.3 million in cruises.
North Region receives 80% of cruise passengers
Referring to the Northern region, the governor indicated the importance of the fact that “during 2022 it received more than 1.1 million tourists through its airports and 80% of cruise passengers. Regarding remittance flows, in the same year the arrival of almost US0 billion was recorded throughout the national territory, of which 40% were destined for the Cibao. Meanwhile, foreign direct investment (FDI) exceeded US$4 billion last year, of which close to US$1 billion went to projects located in this area”.
In this context of high foreign currency generation and to avoid an abrupt appreciation of the Dominican peso that harms the competitiveness of the activities of the external sector, the Central Bank has been buying significant amounts of dollars from financial intermediaries through auctions on its electronic platform. .
Valdez Albizu explained in this regard that “during 2022, the Central Bank made net purchases of foreign currency for some US$600 million, which has contributed to the strengthening of international reserves that are located around US6,300 million.” To the date”.
Juan Ventura: “We are a region that promotes prosperity”
Prior to the governor’s conference, the president of AIREN, Juan Ventura, expressed in his welcoming remarks that the Cibao constitutes “an economy and a region that promotes prosperity,” as demonstrated by the results of the recent ‘Impact Study of the work of the Family Business Development Center’, created by AIREN, in strengthening family businesses in the Dominican Republic”.
Ventura highlighted that, according to said study, the average employment went from 53 jobs per protocolized companies to 95 jobs per company, for a growth of 79%; 91.4% have a well-defined and documented organizational structure; 42.9% of these companies have started new businesses in the period; and 91.4% have made new investments in technology/systems, new equipment, infrastructure, after signing the protocol; among other contributions.
In addition, he pointed out that the Central Bank has promoted solid strategies that are allowing us to overcome the difficult moments experienced due to the COVID-19 pandemic, the War in Russia and Ukraine, and other external factors that have weighed heavily on our economy. “There is nothing more precious to us, the industrialists, than macroeconomic stability and governability, essential conditions for investments to prosper”, he affirmed.
He considered that “the macroeconomic stability that has been threatened by inflation -with multiple external and some internal order factors- and the policies of the Central Bank, along with other government decisions, have managed to put us on the right path.”
Economic importance of the Northern region
In his conference, Governor Valdez Albizu pointed out that “the Central Bank has always recognized the contribution of the Northern region to the growth of the nation, and for this reason, created in 2017 the Division of Regional Studies and Statistics, based in the Office Region of Santiago”.
Valdez Albizu indicated that “the investigations carried out indicate that the fourteen provinces of this geographical enclave contribute between 32% and 38% of the national economic activity.”
Other conclusions reveal that “Cibao has remained a leader in agricultural production, being the main supplier of food in our country, supplying about 55% of national agricultural production. Additionally, the Northern region has a leading role in various agricultural products that have positioned themselves as leaders in international markets. Thus, the Cibao concentrates 77% of the area planted with cocoa and more than 90% of the national production of tobacco for cigars”.
On the other hand, he reported that “the North region stands out in the free zone sector, concentrating more than half of the country’s industrial parks, which are home to almost 400 companies of this type. In addition, this activity was one of the most important in the recovery process after the pandemic and has contributed to sustaining employment, generating more than 200,000 direct jobs nationwide, of which some 70,000 are in the region. of Cibao”.
In turn, according to estimates by the Central Bank, “the North region has an incidence of 40% of the construction activity at the national level, in addition to being home to several of the main cement and steel producing companies in the country. Likewise, the region is home to the largest mining companies and those that contribute the most to the national gross domestic product (GDP).
The governor expressed that “this economic boost of the Cibao is reflected in the development of the financial system, concentrating 37% of the country’s bank offices, which has allowed greater access to financing for companies and households. In addition, around 40% of ticket processing, deposits and cash withdrawals by financial intermediaries are carried out through the Santiago Regional Office”.
New projects
Activity in the North region will benefit from “various road and mass transportation infrastructure works that are being built in the region, as well as the Manzanillo port expansion project, which will significantly improve Cibao’s competitiveness. Also, in Manzanillo, the installation of 1,200 megawatts of energy stands out, which would complement the energy production matrix of the region, where half of the country’s hydroelectric plants are located”.
Additionally, in the tourism sector, the Punta Bergantín project in the province of Puerto Plata acquires great value, which includes the construction of hotels, a film studio and a campus designed to promote innovation; which will be an important source of quality job creation for the region.
Challenges and prospects
Valdez Albizu indicated that “extreme weather events pose a permanent risk to our economy. For example, the occurrence of floods, tornadoes and storm Fiona at the end of last year, as well as the current drought, have meant a great challenge for national agricultural production. In addition, the increasing arrival of sargassum to our coasts represents a great challenge for tourism and other areas of the economy”.
In addition, the governor stressed that “the Dominican Republic has great opportunities for mining that must be taken advantage of, implementing measures that guarantee environmental sustainability. In turn, the geographical location and logistics processes of our country are favorable for attracting companies that seek to bring their production chains closer to the markets, which is known as nearshoring”.
Valdez Albizu concluded by expressing his confidence that “the Dominican Republic will continue to successfully overcome future challenges and preserve the macroeconomic stability that has characterized us, supported by the strength of its economy and the commitment of its productive sectors, such as those represented here.”
The table of honor for AIREN’s annual lunch was made up, in addition to Valdez Albizu and Ventura, by the Superintendent of Banks and ex officio member of the honorable Monetary Board, Alejandro Fernández; the provincial governor, Rosa Santos; Ulises Rodríguez, director of Proindustria; Rafael Santos, general director of INFOTEP; and AIREN executives, Ricardo Brugal, Vice President, Christian Reynoso, 2nd. vice president and Alba Luz Díaz, vice treasurer.
The Central Bank was represented by Lieutenant Governor Clarissa de la Rocha de Torres, Manager Ervin Novas Bello, Deputy Managers Joel Tejeda, Ramón González and Máximo Rodríguez; the adviser to the Governor Julio Andújar; and the directors Joel González, Elina Rosario, Brenda Villanueva, Carlos Delgado and Yamil Espinal.
