Dominican Republic: Economic activity growth dips in May
Economic activity expanded 21.2% year-on-year in May (April: +47.1% yoy). While May’s reading was partly driven by a base effect, economic activity was also 4.7% higher than in May 2019. Construction and domestic manufacturing led the expansion in May. Moreover, the hotels, bars and restaurants subsector surged in annual terms, although this was largely because the country was closed to international tourists in May last year, as visitor arrivals are still only three quarters of their pre-pandemic levels.
Meanwhile, the trend improved sizably, with the annual average variation of economic activity coming in at an over one-year high of plus 2.0% in May, contrasting April’s minus 0.8%.
High new Covid-19 cases forced the government to reimpose some restrictions from late-May, which will likely drag on activity slightly in the near term. However, underlying momentum should strengthen later in the year as the vaccination rollout continues at home and abroad, and thanks to vast U.S. stimulus. Year-on-year GDP growth will continue to ebb on a less favorable base effect.