Santo Domingo. – During January-June 2020, the real Gross Domestic Product (GDP) registered a drop of -8.5% compared to the same period of the previous year, according to a report released by the Dominican Republic Central Bank (BCRD).
The entity attributes the drop to the temporary closure of the economy, along with the sanitary protocol measures to control the impact of COVID-19.
However, the BCRD clarifies that after this historic low, the economy has exhibited a less negative behavior with interannual rates of -13.6% in May and -7.1% in June, with the beginning of the staggered re-opening of the economy.
“In these recent results, which show a trend towards recovery, they reflect that the gradual reactivation of economic activity according to the de-escalation plan implemented by the Executive Power that began towards the end of May and lasted through June, I cushioned the negative impact of the confinement measures in the productive sectors in the second quarter, propitiating a greater dynamism in domestic demand compared to the first months of the pandemic”, says the report.
The gradual reopening of the economic activities, together with the coordination of monetary and fiscal policy to support households and companies and the expansion of targeted social spending together with tax facilities, had a notable impact and prevented a more severe impact of the pandemic.
The biggest drop was in the hotels, bars and restaurants sector (-43.3%), construction (-19.5%), mining and quarrying (-15.6%), other service activities (-12.1%), transportation and storage ( -10.8%), free zones (-9.6%), local manufacturing (-5.5%), education (-3.6%) and commerce (-3.1%).
In a positive way, the impact of Covid-19 has affected the growth of sectors such as health (12.0%), financial services (10.9%), real estate activities (4.8%), agriculture (4.5%), communications (2.9%), public administration (2.0%) and energy and water (1.5%).
Commerce, construction, local manufacturing, and free zones were the first to restart operations in May. Since June, the growth of construction (11.7%) and local manufacturing (2.8%) has been standing out.
The Central Bank of the Dominican Republic (BCRD) specified that during the first two months of the year the Dominican economy registered an average growth around its potential of 5.0%, however the local spread of the coronavirus in the country led to the implementation of strict confinement, a temporary closure of non-essential productive activities, restrictions on freedom of transit, closure of maritime and land-air borders, among other provisions.