Dominican Republic: Economy gains further momentum in Q4 2019
January 28, 2020
The economy surged 5.8% in Q4 according to preliminary data, up from Q3’s 4.8% expansion and likely marking the strongest reading in Central America and the Caribbean. The positive showing was driven in significant part by substantial monetary easing earlier in 2019 in the form of rate cuts and liquidity injections, which have dynamized private credit.
Looking at key sectors, the fourth quarter’s reading was driven by a booming construction industry, which benefited from housing, tourism, retail, infrastructure and energy projects. Growth was also solid in the financial sector, although the hotels, bars and restaurants sector contracted—likely linked to lower tourist arrivals.
Turning to 2020, our panelists expect growth to ebb on slower momentum in the U.S., the Dominican Republic’s key trading partner. However, past monetary stimulus should continue to support the economy, which will likely remain the region’s top performer.
Author: Oliver Reynolds, Economist