The Dominican Republic is projected to be among five countries with the highest regional economic growth rate in 2021, according to the Economic Commission for Latin America and the Caribbean (ECLAC).

ECLAC has assessed that at the end of 2021, the Dominican economy should have grown to 10.4 per cent, which would place it among the five nations in the Latin American and Caribbean (LAC) region, whose gross domestic product (GDP) for 2021 would have exceeded 10%.

In its preliminary balance of the Economies of Latin America and the Caribbean 2021, published this month,  ECLAC points out that of the 33 countries analysed in the LAC region, the Dominican Republic only precedes Guyana, for which a growth rate of 18.5 per cent is projected.

The growth rate for Peru is projected at 13.5 per cent, followed by Panama with 12.4 per cent and Chile next with 11.8 per cent.

Projections for 2022

However, for 2022, the projections for the Dominican Republic is for economic growth slowing to reach 5.5 per cent. In its “World Economic Prospects” report, the World Bank projects that this year and the next, the economic growth of the Dominican Republic will be reduced by at least 5.0 per cent.

Both the World Bank and ECLAC project a slowdown in the growth of the world economy this year. ECLAC projects that world economic growth in 2021 will be 5.8 per cent and 4.9 per cent in 2022.

ECLAC points out that for the countries of the region, the macroeconomic situation will become worse saying it will be more uncertain and complex this year with slower-than-anticipated economic growth and job recovery. This is in addition to greater inflationary pressures and high exchange rate volatility, which will add to the economic growth.

ECLAC also points to low levels of investment and productivity, informality, inequality and poverty.

According to ECLAC, “with the growth rates expected for 2021 and 2022, less than half of the countries in the region will have managed to recover the activity levels of 2019, before the crisis.”

The organisation emphasised that 11 countries should have achieved 2019 activity levels in 2021 and another three countries will join pre-COVID levels in 2022.

This should show that the crisis caused by the pandemic has had lasting effects on the growth of the economies of much of Latin America and the Caribbean and has aggravated the structural problems that already characterized the region before the crisis.

In its report, ECLAC commented that, “In a framework of growing uncertainties about the dynamics of the pandemic, growth, inflation and prolonged negative supply shocks, a global macroeconomic scenario is observed with increasing uncertainties in relation to the monetary policy responses by developed countries. For this reason, it is expected that in 2022 the region will face a more complex external scenario, with less economic dynamism and greater volatility and monetary and financial uncertainty.”