Dominican Republic: Services and tourism drive 5.4% GDP growth

The economy of the Dominican Republic grew by 5.4% from January to September 2022 compared to the same period in 2021, thanks to the dynamism of services and tourism, informed the Central Bank of the country (BCRD).

Services contribute around 60% to the Gross Domestic Product (GDP), hence the strategic relevance of achieving an increase of 7.2%, a level above the national average.

“The activity of hotels, bars, and restaurants has had the greatest impact on GDP performance in the first nine months of 2022″, ” said Héctor Valdez Albizu, the BCRD governor.

The relative variation of hotel and restaurant activity reached 28.9%, which explains almost “one-third of the total expansion of the same in the referred period”, detailed the official.

The Dominican Republic is experiencing the year 2022 with a full recovery in tourism. As of September, the destination welcomed more than 5.33 million tourists, 6.48% more than the 5 million a year ago, according to figures from the Minister of Tourism.

David Collado, Minister of Tourism, predicts that the country will attract more than 7 million travelers by the end of the year. Tourism alone represents 15% of the Dominican GDP and generates almost 900,000 jobs.

“Despite the adversities faced by the tourism industry worldwide due to the current international situation, the Dominican Republic remains the leading destination in terms of tourist arrivals in the Insular Caribbean region and Central America,” said Valdez Albizu.

He noted that Dominican tourism had shown resilience in the face of two events of international impact, Covid-19 and the war between Russia and Ukraine.

PROGRESS BY SECTOR

Among other sectors with performance above the measure were health (11.7%), other service activities (9.1%), public administration (7.8%), transport and storage (7.0%), commerce (6.6%), free zones (6.6%) and financial services (5.7%).

However, local manufacturing was below average growth, with 4.3%, agriculture and livestock grew at 3.8%, and construction at 2.2%.

The Dominican labor market is still in slow recovery. The open unemployment rate stood at 4.8% between July and September 2022, a reduction from the 8% recorded from January to March 2021, according to the Continuous National Labor Force Survey (ENCFT) results.

The BCRD forecast that real GDP will strengthen from 5% to 5.5% by 2022, with a nominal GDP of US$112 billion, and develop the economy’s potential pace.

With information from Bloomberg