That reported the Central Bank of the Dominican Republic (BCRD) in 2020 remittances reached their highest growth in the last ten years, at US $ 8,219.3 million, 16.0% over 2019.
In December, the flow of remittances entering the country was $ 872.3 million, a value that is $ 215.6 million (32.8%) higher than that recorded in the same month of the previous year, when it reached $ 656.7 million. dollars, according to a statement from the institution.
The BCRD explains that The continued recovery in economic conditions in the United States (US) after the reopening, the country where 83.8% of flows in the past 8 months came from, was decisive in the behavior of remittances received.
Evidence of this improvement in the North American economy can be found in the employment data, with the unemployment rate going from 14.7% in April, at the worst time of incarceration, to 6.7% at the end of the year. In a certain way Spanish unemployment in the US fell from 18.9% in April to 9.3% in December 2020.
The institution emphasizes that the Dominican diaspora was one of the communities that benefited most from this job improvement, as well as from the US government’s financial support for the unemployed in that country, given the high percentage of Dominicans who work. are regularized. At the same time, it emphasizes that, following the adoption of the new economic bailout package by the US Congress, it is expected to continue in the first months of 2021.
He adds that a relevant indicator of the behavior of the North American economy is the purchasing managers index (PMI), which reflects the behavior of manufacturing activity. This indicator reached its maximum value of 60.7 in December, 3.2% higher than 57.5 in November, reinforcing optimism about the economic recovery. The index registered an average monthly growth of 1.4% since June when manufacturing activity in the US was reactivated.
Given these results of the United States economy, the Dominican external sector is projected to outperform at the start of the pandemic by the end of 2020. In fact, the flow of foreign exchange into the economy continued to recover steadily from May onwards, with the increase in remittances, the improvement in exports from free zones, the reopening of airports and hotels, as well as higher gold exports, creating a current account deficit. about 2.0% of GDP is expected, which would be among the lowest in Latin America.
Investment
In addition, major companies in the communications, energy, mining and free zones sectors have announced that significant investments will be made in the coming years, some of which will begin this year, reflecting investor confidence in the resilience of the economy. Dominican; bringing this year to a close, despite the pandemic crisis, foreign direct investment (FDI) would be about $ 2,554.3 million, which, according to preliminary figures, would be the highest compared to those of Central American and Caribbean countries, as well as those of other Latin American countries with economies similar to that of the Dominican Republic.
The BCRD emphasizes that this level of foreign direct investment in the country would cover almost twice the estimated current account deficit of 2.0% of GDP. This improvement in the currency flow, along with the Central Bank’s participation in the foreign exchange market through its electronic foreign exchange trading platform, allowed the relative stability of the exchange rate to be maintained and the accumulation of international reserves, which accounted for approximately US $ 10.750 million in by the end of 2020, the highest historical level, equal to 13.7% of GDP and 7.3 months of imports, values exceeding the IMF recommended thresholds of 10% of GDP and 3 months of imports.
The Central Bank reiterates its vigilance to continue taking the necessary steps to ensure price and currency market stability during the process of reactivating the Dominican economy.