Dominican Republic: Revised data confirm abrupt slowdown in Q1
June 28, 2013
According to a more complete set of data, GDP grew a meagre 0.3% in the first quarter over the same period last year. The figure was only a fraction of the 3.9% expansion recorded in the fourth quarter last year and was in line with the preliminary estimate released on 31 May. The Q1 print marks the slowest expansion seen since Q3 2008.
The deterioration in the first quarter was due to a contraction in domestic demand, whereas the external sector improved compared to the previous quarter. Total consumption swung from a 1.1% rise in Q4 2012 to a 2.6% fall in Q1, as both private consumption (Q4 2012: +1.1% year-on-year; Q1: -2.2% yoy) and government spending (Q4: +2.8% yoy; Q1: -12.7% yoy) worsened markedly over the previous period. In addition, fixed investment contracted 3.8%, which followed the 0.1% drop seen in Q4.
On the external side of the economy, exports rose 6.6% (Q4: +8.6% year-on-year), while imports dropped 2.6% (Q4: -0.5% yoy). As a result, the net contribution from the external sector to overall growth rose from 2.8 percentage points in the fourth quarter to 3.3 percentage points in the first.
The Central Bank sees GDP expanding 3.0% in 2013. FocusEconomics Consensus Forecast participants are more optimistic than the Central Bank and see the economy growing 3.5% in 2013, which is down 0.3 percentage points from last month's forecast. For 2014, panellists anticipate economic growth to pick up to 4.1%.