Investment in Dominican Republic
Dominican Republic - Investment
Economy plunges in Q2 overall, although contraction eases in May and June
The economy contracted 16.8% in the second quarter according to monthly economic activity (IMAE) data as domestic lockdown measures and the border closure crushed activity (Q1: +0.2% year-on-year). While a breakdown by sector has yet to be made available, Q2’s reading was likely driven by steep falls in the hotels, bars and restaurants; construction; and mining sectors. More positively, economic activity started to recover in May and June, after reaching a low point in April, as containment measures were lifted.
Turning to the second half of the year, despite the reopening of international borders from 1 July, the rebound in the economy could stall after the government reimposed the state of emergency until 10 August due to surging new Covid-19 cases. Health concerns will also temper tourist arrivals.
Regarding the medium-term outlook, Carlos de Sousa, economist at Oxford Economics, comments: “We expect a sharp rebound in 2021, supported by expansionary fiscal and monetary policies, but the economy will remain below its pre-crisis trend as the tourism sector is unlikely to recover its 2019 level until 2023.”
The panel expects the economy to contract 4.2% in 2020, which is down 0.7 percentage points from last month’s estimate, and to expand 5.6% in 2021.
Dominican Republic - Investment Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Investment (annual variation in %) | 18.9 | 12.3 | -0.3 | 13.3 | 8.1 |
Dominican Republic Investment Chart
Source: Dominican Republic Central Bank and FocusEconomics calculations
Dominican Republic Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 52.96 | 0.80 % | Jan 01 |
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Economic News
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Dominican Republic: Inflation hits highest level in nine years in January
February 15, 2021
Consumer prices rose 0.97% in January over the previous month, accelerating from December's 0.48% increase.
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Dominican Republic: Decline in economic activity softens in December
February 2, 2021
Economic activity slid 1.0% year-on-year in December (November: -3.4% yoy).
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Dominican Republic: Central Bank keeps rates steady in January
January 31, 2021
At its end-January meeting, the Central Bank (BCRD) kept the policy rate at 3.00% for the fifth month running, following easing last year in the form of liquidity injections and 150 basis points of rate cuts. The decision not to cut further was likely influenced by improving domestic and external dynamics lessening the need for further stimulus: Domestically, the contraction in economic activity moderated in December, while externally, many economies performed better than expected towards the end of last year, and the vaccine rollout is supporting optimism over global growth ahead.
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Dominican Republic: Inflation hits highest level since July 2013 in December
January 14, 2021
Consumer prices rose 0.48% over the previous month in December, which was below the 0.60% rise recorded in November.
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Dominican Republic: Central Bank keeps rates steady in December
December 30, 2020
At its end-December meeting, the Central Bank (BCRD) kept the policy rate at 3.00% for the fourth month running, following sizable easing earlier in the year. The decision not to cut further was likely influenced by improving domestic dynamics, with the decline in economic activity continuing to moderate through November.
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