Dominican Republic: Growth eases in Q1 despite solid economic momentum
May 8, 2017
The economy continued to perform robustly at the outset of the year, growing 5.2% in the first quarter in annual terms, according to preliminary data from the Central Bank. Although the Dominican Republic continues to be one of the fastest growing economies in the region, Q1’s expansion marked the slowest reading since Q2 2013 and a moderate deceleration from the 5.9% increase registered in the previous quarter.
Although economic growth in the country continued to benefit from multiple tailwinds, the fading of some of these, most pressingly low interest rates and oil prices, likely weighed on Q1’s reading. Although a breakdown by expenditure is not available, comprehensive data by sector shows strong performances in financial services, agriculture, construction, hotels and restaurants and communications. These outstripped declines in healthcare, public utilities and mining operations.
The Dominican economy remains on track to grow robustly for yet another year, with recent data for remittances, tourism revenues, export growth and FDI inflows all expanding healthily. S&P Global Ratings recently reaffirmed the country’s BB- rating with a stable outlook, citing the diversified economy and higher growth compared to the region’s average as reasons behind their decision.
Author: David Ampudia, Economist