Abinader marches confidently toward re-election, amid a weak and divided opposition

DOMINICAN REPUBLIC - Report 18 Mar 2024 by Magdalena Lizardo

The new year got off to a good start, with economic activity growing 4.6% y/y in January, similar to the 4.7% y/y growth of December 2023. Inflation also performed well, declining for the second consecutive month, to 3.3% y/y in February.

The monetary policy rate has remained unchanged since December, while credit to the private sector continues to grow, even though the lending rate has been rising since then.

The exchange rate appreciated slightly in February, after depreciating powerfully in January. This is happening as net international reserves have decreased to nearly $14.1 billion in February. The trade deficit likely increased in February 2024, compared to the same period in 2023, since exports of goods contracted slightly y/y, while imports increased.

Both the income and expenses of the central government grew above 20% y/y in January and February, and the accumulated income growth in these two months exceeds expense growth.

In politics, President Luis Abinader's re-election prospects in the May 19th presidential election are strengthening, with second and third-place candidates Leonel Fernández and Abel Martínez together polling at less than half of Abinader’s numbers. Some 64% of voters say they plan to vote for Abinader, against just 19% for Fernández, and 12% for Martínez. Recent polls also suggest that the election is likely to be decided in the first round of voting.

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