GDP growth for Q1 2015 reported at 6.5%

DOMINICAN REPUBLIC - In Brief 21 May 2015 by Pavel Isa

---

The Central Bank reported that the Dominican economy recorded an outstanding 6.5% GDP growth in Q1 2015 compared to the same period in 2014. This is the highest rate of economic growth in the region when compared to forecasts. Panama is the second highest with 5.1% followed by Guatemala (4.4%), Honduras (3.4%), Nicaragua (2.8%), Chile (2.4%), Mexico (2.3%) and Costa Rica (2.1%). Construction was the leading sector with a recorded rate of growth of 14.9%, followed by commerce (10.6%), finance (7.4%), transportation and storage (6.2%), education (9.4%), agriculture (5.8%), domestic manufacturing (5.5%), and hotels, bars and restaurants (4.9%). These activities explained 76.0% of total growth for the period. Balance of Payments preliminary results for Q1 also showed a remarkable outcome. Current Account registered a surplus of USD 246.4 million, a direct consequence of a reduction in imports of 2.8% due to a decline prices of oil which caused a reduction of 32% (USD 313 million) in imports value, and an increase in revenues from tourism and remittances of 7.4%. Also Foreign Direct Investment (FDI) reached USD 486 million. The combinations of these elements more than counteracted the decline in exports (4.8%) that resulted mainly from a reduction in prices of gold. Once again, the figures were received with skepticism by a significant part of public opinion. There is a generalized perception that growth is not benefiting people, that job creation is weak and that wages have remained stagnant in spite of the successful macroeconomic performance pictured by the Central Bank. Figures on the evolution of real wages support that perception. However, the Central Bank claimed tha...