Dominican Economy Recorded 2.4% Growth in 2023

• The Dominican Republic’s Central Bank (BCRD) reported a 2.4% year-on-year expansion in the economy for 2023, surpassing initial projections and exceeding the Latin American average growth estimated at 2.2% by the World Bank.
• The Monthly Indicator of Economic Activity (IMAE), a key indicator of robust economic performance, recorded a 4.7% year-on-year expansion in December 2023, marking the highest monthly rate of the year.
• Inflation, on the other hand, showed a downward trend, ending 2023 with an annual rate of 3.57%, the lowest in the last five years. This achievement positions the Dominican Republic below the central bank target range of 4.0% ± 1.0% set in the monetary program and could mean further monetary policy loosening in 2024.
• Notably, BCRD is expected to reduce its monetary policy rate by another 200 basis points to 5.00% by end-2024 through a measured and cautious rate loosening cycle, especially given uncertainty regarding the scope and timing of the US Federal Reserve’s rate cutting cycle. 
• The tourism sector played a pivotal role in economic growth, with tourism income reaching US$9,828.9Mn, a 16.9% year-on-year increase from 2022. Remittances received in 2023 amounted to US$10.16Bn, growing by 3.1% compared to the previous year. Foreign direct investment (FDI) also saw a significant increase, reaching US$4.38Bn in 2023, a 9.2% rise from the previous year. Sectors such as tourism, energy, and real estate stood out in this FDI increase. 
• These optimistic figures position the Dominican economy for favourable performance in 2024, with growth projections of 5%, one of the highest in Latin America. The expectation is that monetary stimulus, public investment, and continued foreign direct investment will further boost economic activity while maintaining inflation within established parameters.

(Source: Dominican Today)