Dominican Republic: Decline in economic activity softens in September, but economy still shrinks markedly in Q3
October 23, 2020
Economic activity declined 5.6% compared to the same month a year earlier in September, which was above August's 7.2% decrease and marked the strongest reading since February. The softer fall was likely driven in part by an incipient recovery in visitor arrivals following the reopening of borders in July, stronger remittances and the effect of fiscal and monetary stimulus. Over Q3 as a whole, the economy shrank 7.2%, up from the 16.9% plunge in Q2.
Looking at individual sectors, the hotels, bars and restaurants sector plummeted in September, while retail and transport were also down, albeit at much more moderate rates. Other areas of the economy performed more strongly, with financial services, health, housing and communications registering growth. Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at minus 4.6%, down from August's minus 3.7%.
Looking ahead, the economy should continue to gradually gain steam amid a resumption of construction projections and a gradual revival in tourism and external demand. However, the uncertain evolution of the pandemic at home and abroad is a downside risk.