Dominican Rep: Growth significantly lower than expected in 1Q-2013
Yesterday, the Central Bank released its first quarterly report for 2013. The figures are staggering. Compared to the 1Q-2012, GDP growth was 0.3%, the lowest in almost 10 years (we forecasted 1%). Local manufacturing activity dropped by 3.7%, construction by 2.9%, and commerce by 2.6%. Agriculture showed a modest 1.2% growth. As a result, imports showed a noticeable reduction of 5%, and oil imports of 7.3%. This resulted in a significant reduction in Current Account deficit: from USD 544 mill in 1Q -2012 to USD 143.4 in 1Q-2013. These figures are the reason why the government decided to increase public spending for 2Q-2013 as well as to ease monetary policy. Public spending growth will mean a correction in fiscal activity since during the first quarter spending fell below target. We will provide more information in our upcoming monthly report.