Dominican Republic: Q4 GDP grows at fastest pace in more than two years
March 31, 2011
According to a more complete set of data released by the Central Bank on 31 March, GDP grew 8.3% in the fourth quarter of 2010. The reading exceeded the 7.7% increase recorded in the third quarter and marked the strongest quarterly print since the second quarter of 2008. The Q4 reading reflected an improvement in the net contribution of the external sector. The domestic sector continued to expand at healthy pace, but slowed compared to the previous quarter. Total consumption decelerated from an 8.4% annual rise in Q3 to a 7.5% expansion in the fourth quarter, while fixed investment slowed more markedly to 8.9%, from 20.4% in Q3. Meanwhile, exports rose 16.5% (Q3: +15.5% year-on-year), while imports increased 12.0% (Q3: +20.6 yoy). As exports outpaced imports, the net contribution to growth of the external sector stepped up from minus 3.8 percentage points in Q3 to minus 0.6 percentage points in Q4. In the full year 2010, GDP grew 7.8%, more than doubling the 3.5% increase recorded in 2009. In fact, the reading marked the fastest pace recorded in the last four years and beat Central Bank's expectations of a 7.0% expansion. More recent data confirm the healthy state of the economy, as the monthly economic activity gauge (IMAE, Indicador Mensual de Actividad Economica) published by the Central Bank recorded an average 5.2% increase in the January-February period, compared to the same period last year. The Central Bank expects the economy to grow 5.5% in 2011. Consensus Forecast participants see the economy growing 6.8%, which is up 1.0 percentage points from last month's forecast. For next year, panellists anticipate that economic growth will moderate to 6.6%.
Author: Armando Ciccarelli, Head of Data Solutions