Dominican Republic: Economy expands at fastest pace in four years
December 21, 2010
According to preliminary Central Bank estimates released on 21 December, GDP grew 7.8% for the full year 2010. The reading more than doubled the 3.5% increase recorded in 2009 and also marked the fastest growth over the last four years. The strong result also beat Central Bank's expectations of 7.0% economic growth in 2010. The healthy performance of the Dominican economy was driven by strong results in the manufacturing sector and the key service activities. In particular, local manufacturing rose 8.6%, up from the 1.0% increase recorded in 2009. Free-trade zones manufacturing rose 0.4%, contrasting the 2009 decrease of 14.6% and marking the first positive result after four years of contraction. Among service activities, commerce swung from a 2.8% contraction to a 12.1% expansion, while financial intermediation rose 11.3%, up from the 2009 expansion of 8.3%. Based on annual figures, the economy expanded 8.4% in the fourth quarter, up from the 7.8% third quarter increase. The reading represented the fourth consecutive quarter with growth above 7.0% and marked the strongest result since the second quarter of 2008. Meanwhile, on 20 December, the International Monetary Fund (IMF) completed the fourth review of the Stand-By Arrangement (SBA), signed by the Dominican Republic and the IMF in November 2009. As the country met all the requirements set out in the review, the IMF allowed the immediate disbursement of a USD 168 million tranche of the total USD 1.72 billion loan agreed to under the SBA. The Central Bank expects the economy to grow between 5.5% and 6.0% in 2011.
Author: Armando Ciccarelli, Head of Data Solutions