Santo Domingo.- The Dominican government has revised its projection of economic growth for 2023, reflecting greater uncertainty both internationally and internally. The initial estimate of 4.25% growth in March was later reduced to 4% in June and further reduced to 3% in August, according to the Macroeconomic Panorama 2023-2027 report by the Ministry of Economy.
In July 2023, economic activity experienced year-on-year growth of 2.9%. However, cumulative growth for the first seven months of the year was only 1.4%, compared to 5.5% in July of the previous year. The Ministry of Economy attributes the expansion registered until July to improvements in the local manufacturing industry, construction, commerce, and transport. This may have been influenced by liquidity provisions and reductions in the monetary policy rate implemented by the Central Bank.
Looking ahead to 2024, the economic outlook looks more positive. The projected real gross domestic product (GDP) expansion is expected to be between 4.50% and 5.00%, with a central projection of 4.75%. This represents a reduction of 0.25 percentage points from the previous forecast.
In terms of inflation, projections indicate a year-on-year rate of 4.0% for 2023, with an average of 4.75%. By 2024, both the closing rate and average inflation are expected to be at 4.00%, within the target range outlined.
The average exchange rate of financial institutions is expected to end in 2023 at 56.60 pesos per dollar, which represents an increase of 0.45 pesos compared to the June forecast. The following year, the average rate is expected to increase to 60.25 pesos per dollar.
Despite the economic challenges, international organizations consensus that the Dominican Republic will experience growth of 3.9% in 2023 and 4.2% in 2024, making it one of the best performing countries in the region. The projections for 2023-2025 align between the Ministry of Economy, the Central Bank of the Dominican Republic, and the Ministry of Finance.