World Bank Predictions Reassure The Country

• Dominican Republic will be one of the few economies in Latin America that will experience growth this and next year. This statement was made by the Central Bank of the DR (BCRD) and supported by the World Bank, as it forecasts 5.0% growth for the country, while reducing forecasts for almost two dozen countries in its recent “World Economic Outlook”. 
• The International Monetary Fund (IMF) and the international risk rating agency Moody’s have co-signed the excellent performance of DomRep, reaffirming that the country’s prospects remain favourable with a similar GDP growth projection of around 5.0%. 
• According to the BCRD, the economy achieved a growth of 5.8% in January-April 2022, and registered an increase of 4.7% in April alone. Growth in the first quarter of the year was 6.1% owing to the recovery of the hotels, bars, and restaurants sector. 
• However, the World Bank warns that “an aggravating factor of the damage caused by the COVID-19 pandemic, and the Russian invasion of Ukraine have exacerbated the slowdown in the world economy, which is entering what could become a prolonged period of low growth and high inflation.” 
• Notably, the danger of the economic situation that has prevented many countries from growing is that it increases the risk of stagflation (a period of high inflation combined with economic stagnation) with potentially damaging consequences for both middle-income and low-income economies. 
• The Central Bank has preventively raised its monetary policy rate by 350 points, from 3.00 in December 2021 to 6.50 points in June 2022, to counteract domestic inflation. However, it is taking care not to cause an abrupt drop in economic activity and employment due to higher borrowing costs.

(Source: Dominican Today)