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