Punta Cana.-By the end of this year, economic growth in the Dominican Republic will return to its potential path of 5.0%, inflation will remain around the center of the policy target range of 4.0% ± 1.0% and interest rates will move towards low, if the risk factors do not intensify.
The Central Bank expert, Osvaldo Lagares, indicates the prospects for growth and stability for the current year.
In the article, published in the Página Abierta section, it states that for this year the exchange rate is expected to remain relatively stable around its average historical variation, given the foreign currency income that the country receives, where it is forecast that these income exceeds the performance exhibited during 2023.
Remittance flows reached US$10,157.2 million, tourism income stood at US$9,828.9 million and foreign direct investment amounted to US$4,381 million.
However, these projections are threatened by international risk factors that have been identified by international organizations as the most likely to contribute to this slowdown in growth.
Among which the continuity of geopolitical tensions and war conflicts in Eastern Europe, and more recently in the Middle East, stands out.
In particular, the possibility of the war conflict between Israel-Hamas escalating to a regional level and the attacks carried out by Yemen’s Houthi rebels on international merchant ships transiting the Red Sea towards the Suez Canal to connect with the routes commercial maritime routes of the Mediterranean Sea.
This conflict could lead to reorienting trade routes towards other destinations through the Cape of Good Hope in southern Africa, thus increasing not only the days of maritime transit, but also the operational costs and therefore the freight and aggregate costs of international transportation of merchandise.
“In fact, recent information published by BBC Mundo shows that maritime freight rates for transporting goods from East Asia to northern Europe have increased by more than 110%,” – he says.
The report concludes by explaining that given the intensification of risk factors at an international level that could affect the country’s economic performance, the Central Bank is continuously monitoring these risk factors, in order to adopt preventive and timely measures of policies that are necessary to preserve the stability and growth of the economy.
GDP per capita
11,200 Dollars.
Gross domestic product per capita of the Dominican Republic placing it in a middle-income economy.
Indicators
—1— Stability
The total assets of financial intermediation entities have reached RD$3.50 trillion (51.4% of GDP) and the credit portfolio has amounted to RD$1.93 trillion.
—2—Agreements
By the middle of this year, these risk factors could be corrected if greater multilateral cooperation between countries is achieved.