Dominican Republic: Economy slows in Q3 on decelerating domestic demand
January 1, 2015
According to more detailed data from the Central Bank, the economy grew 6.3% in the third quarter over the same period the previous year. The result was a slowdown over the 7.5% increase observed in the second quarter.
Q3’s expansion came on the back of a deceleration of domestic demand, while the external sector improved compared to the previous period. Private consumption grew 2.5% in Q3, which was down from the 4.3% rise seen in Q2. In addition, fixed investment grew 5.6% (Q2: +11.0% year-on-year). On the other hand, government consumption accelerated from a 6.8% growth in the second quarter to a 14.0% increase in the third.
On the external side of the economy, exports accelerated from a 4.0% rise in Q2 to a 6.2% increase in Q3. Conversely, imports grew 3.4%, which was down from the 5.8% increase seen in Q2. As a result, the external sector’s net contribution to growth swung from minus 0.7 percentage points in Q2 to plus 0.9 percentage points in Q3.
According to a preliminary estimate from the Central Bank, the economy expanded 7.1% in 2014 over the previous year, which marked a significant improvement over the 4.6% rise seen in 2013. The figure was driven by expansions in all of the economic sectors with construction and mining recording the biggest expansions over the previous year.
Author: Dirina Mançellari, Senior Economist