Dominican Republic: Economic activity jumps in July as monetary easing kicks in
The economy gained steam in July, according to the Central Bank’s monthly indicator for economic activity (IMAE). Growth accelerated to 4.6%, up from June’s 2.6%, which had marked the slowest reading since September 2017.
While a breakdown by sectors was not available at the time of writing, significant monetary loosening by the Central Bank in recent months—through cuts to the policy rate and liquidity injections to the tune of roughly DOP 34 billion (USD 660 million)—should have supported confidence and activity. However, a more adverse international trading environment likely dampened the headline reading.
For the remainder of H2, the economy will continue to be supported by monetary easing, which should feed through to faster credit growth. However, growth over 2019 as a whole will still slow notably from last year, in line with slower growth in the U.S., the country’s key trading partner.