Dominican Republic: Pace of economic growth softens in Q4

According to preliminary data from the Central Bank, the economy grew 6.1% in the fourth quarter, thus bringing the growth rate for the whole of 2015 to 7.0%. Q4’s expansion represented a slowdown over the 7.4% rise tallied in the previous quarter and marked the slowest increase in ten quarters, although growth did remain robust.

According to the Central Bank, Q4’s deceleration mainly came on the back of weaker growth rate in the industry sector, which slowed from Q3’s 11.9% increase to a 6.0% expansion. The slowdown was mainly caused by a double-digit contraction in mining activity—specifically in extraction of gold and silver ores, which account for about 80% of mineral production. The agricultural sector recorded a 1.2% fall (Q3: -4.5% year-on-year), mainly attributable to a decline in the production of sugar cane. Finally, in Q4, growth in the services sector was broadly stable; the expansion was driven by an increase in demand for energy consumption.

The government’s 2016 budget projects that the economy will grow 5.0% in 2015. FocusEconomics Consensus Forecast participants see the economy growing 5.3% in 2016, which is up 0.1 percentage points from last month’s forecast. For 2017, panelists expect the economy to expand 4.5%.