Wednesday, July 19, 2017

Dominican Republic economic update July

New ecomomic statistics released over the last 30 days confirm a stable inflaction picture with the June IPC  slowing at 2.55% on an annula basis well below the central bank target, thanks to the tight control of the central bank on the monetary aggregates M1 and M2 :
IPC June 2017

M1 and M2 July 2017

Private Sector lending July 2017

With the central bank focused on keeping in check the main monetary aggregates a moderate groth rate of  manufacturing activity is not surprising: the IMAE index indicating a 4 to 5% growth rate well be low last year average.

IMAE index July

The Jan 27 5.95% USD bond of the Dominican Republic is well bid trading around  a 5.18% yield level signaling good market confidence and optimism in the Dominican Republic: the yield is higher than last month but this is the result of year US long term rates with the spread over the US treasury stable at approximately 290/300 basis points.

2027 Dominican Sovereign Bond

Good news from airport arrivals and extrenal remittances both solidly up from last year:

Tourist Airport arrivals keep growing at approximately 6% on an annual basis

I quarter remittances up almost 15% vs last year

Tuesday, June 20, 2017

Dominican Republic economy update

Taking a closer look at the latest string of economic data released by the BCRD we can say that the Dominican Central Bank is doing a good job so far balancing inflation control and economic growth:

1-Inflation looks under control stabilizing just above 3% in May 2017

2-The index of construction prices looks stable:

3-Manifacturing activity is still running at a 6% y/y growth rate in May 2017

Looking at the main monetary aggregates' dynamic with both M1 and M2 frowth rate falling rapidly we do not expect price pressure in the coming months and we expect economic growth to continue thanks to a favourable loans creation dynamic.

Loans to the private sector still growing at an healthy pace 

The Jan 27 5.95% USD bond of the Dominican Republic is well bid trading close to a 5% yield level signaling good market confidence and otimism in the Dominican Republic.