Dominican Republic: GDP expands at fastest pace in three years in Q4 on robust domestic demand
March 31, 2014
According to a more complete set of data, GDP grew 7.3% in Q4 2013 over the same period of the previous year, which was well above the 5.5% rise recorded in Q3. The increase slightly overshot the 7.2% increase reported in the preliminary estimate and marked the strongest result since Q4 2010. In the full year 2013, GDP expanded 4.1%, which was a tad above the 3.9% increase recorded in 2012. The improvement in Q4 was due to an acceleration in domestic demand. Total consumption expanded a robust 2.3% in Q4-up from the 2.0% rise tallied in Q3-as a result of a rebound in government spending (Q3: -9.7% year-on-year; Q4: +0.1% yoy). Private consumption growth, however, inched down to 2.4% (Q3: +2.5% yoy). Fixed investment rebounded strongly, expanding 10.7% in Q4 (Q3: -4.3% yoy). On the external side of the economy, exports rose 10.2% (Q3: +4.3% yoy), while imports recorded zero growth (Q3: -6.8% yoy). As a result, the external sector's net contribution to overall growth deteriorated from 4.5 percentage points in Q3 to 3.3 percentage points in Q4. The government's 2014 budget projects that the economy will grow between 4.5% and 5.0% this year. FocusEconomics Consensus Forecast participants are less optimistic than the government and see the economy growing 3.6% in 2014, which is up 0.1 percentage points from last month's forecast. For 2015, panelists expect economic growth to pick up to 3.7%.