Dominican Republic: Economic activity flatlines in Q1
May 15, 2020
According to preliminary data from the Central Bank, the economy flatlined in the first quarter, down from robust 5.8% growth in Q4. The reading was driven by a sharp contraction in economic activity in March (-9.4% year-on-year) amid lockdown measures both at home and abroad, which offset strong growth in January–February. Domestic lockdown measures included the closure of non-essential activities, a nighttime curfew, border closures and transport restrictions. Looking at the sector-by sector picture, hotels, bars and restaurants; mining; construction and transport suffered the largest declines in Q1.
The economy is seen contracting over 2020 as a whole due to domestic containment measures and recession abroad weighing on exports, tourism and remittances. However, the Central Bank’s expansionary monetary policy—reflected by private-sector credit growth of 13.2% at end-April—should soften the decline.