Dominican Republic: Economic activity loses steam in April and May
July 1, 2019
The economy appears to have lost steam in Q2, according to the Central Bank’s monthly indicator for economic activity (IMAE, Indicador Mensual de Actividad Económica). Growth clocked 3.3% in April and 5.3% in May, below Q1’s 5.7% expansion. The slowdown was likely influenced by a challenging base effect and weaker momentum in the U.S.
According to the Central Bank, in the January-May period as a whole growth was broad-based, with the construction, transport and storage, and hotels and restaurants sectors performing particularly strongly.
Our panelists see growth this year at slightly over 5%, above the regional average but down notably from 2018’s stellar showing amid a slowing U.S. economy—the key source of tourism, export demand and remittances. Moreover, recent security concerns could dent visitor arrivals. However, strong credit provision and the Central Bank’s recent rate cut should keep momentum afloat.
Author: Oliver Reynolds, Economist