Dominican Republic: Economy performs robustly in Q4 on the back of public stimulus
A first estimate released by the Central Bank on 30 January shows the economy gathered momentum in the fourth quarter, following a lackluster performance in the two previous quarters. GDP growth came in at a robust 6.5% on an annual basis in Q4, marking the highest figure since Q2 2016 and more than doubling the 3.0% expansions recorded in both Q2 and Q3.
Although a detailed breakdown of data is not yet available, a looser fiscal stance and the Central Bank’s policy decisions aimed at boosting credit growth likely fueled growth in the fourth quarter. Indeed, economic activity as measured by the IMAE improved markedly in the October-to-December period following hurricane-induced disruptions in September, which in turn had weighed on Q3’s economic performance.
Despite a solid Q4 GDP figure, a weak performance in the previous two quarters meant GDP growth for the whole year decelerated from 6.6% in 2016 to 4.6% in 2017. The softer increase largely reflected a contraction in mining output and weaker services and construction growth, which were only partially offset by a healthy performance in the tourism sector and stronger growth in manufacturing in free economic zones. The Bank has not yet released a breakdown by expenditure components.