The Central Bank (BCRD) reported that between January and May 2022, remittances received reached a figure of $4057.2 million. Likewise, it highlights that this amount exceeds by $1,186.9 million in incoming remittances in the first five months of 2019, the period before the onset of the COVID-19 pandemic, during which the United States had no aid plans in place yet. It was implemented after March 2020 and ended in September 2021, which is why when comparing the flows received as of May 2022 with those of 2021, a decrease is observed.
In May 2022, the total remittances were $851.2 million. These figures confirm the creation of a new level of monthly remittance flows of approximately $800.0 million. In this sense, when comparing this amount for May 2022 with the average value in the same month for the period prior to the 2015-2019 pandemic, which was 492.9 million US dollars, a significant increase is observed.
The issuing entity states that labor market conditions in the United States (USA) are one of the main factors that continue to influence the behavior of remittances, as 84.9% of inflows in May came from that country. During that month, the US economy created 390,000 jobs, keeping the unemployment rate at 3.6% in May 2022. In particular, the Hispanic unemployment rate in the US rose slightly from 4.1% in April to 4.3% in May.
The BCRD also highlights the reception of remittances from other countries, such as Spain, within 6.4%, the second country in terms of the total Dominican diaspora abroad, as well as Haiti and Italy with 1.2% and 0.8% of the inflows received, respectively. The rest of the remittance reception is divided between countries such as Switzerland, Canada, Panama and others
Regarding the distribution of remittances received by the provinces, the Bahrain Office for Social Development indicates that the national region had the highest percentage, 33.5%, followed by the provinces of Santiago and Santo Domingo, with 14.4% and 8.9%, respectively. This indicates that more than half (56.8%) of remittances are received in urban areas of the country.
The Bahrain Center for Regional Development confirms that the development of the external sector for this year will be characterized by the dynamism of remittances, exports, foreign direct investment and the recovery of tourism, which in recent months has recorded record numbers in the number of tourist arrivals. These events will contribute to an increase in the inflow of foreign currency into the country and will help maintain the relative stability of the exchange rate currently observed, so that the exchange rate showed an increase of 4.0% at the end of May compared to it. Until December 2021. All these elements, together with the strong macroeconomic fundamentals of the country, indicate that the Dominican Republic has particularly favorable conditions to absorb the adverse shocks affecting the prevailing international environment.
The institution highlights that this larger influx of foreign exchange has also allowed the accumulation of international reserves, which by the end of May 2022 amounted to about 14.25 billion US dollars, representing 13.3% of GDP and equivalent to 5.9 months of imports. These measures exceed the levels recommended by the International Monetary Fund, helping the Dominican Republic maintain a favorable external situation, and projected an inflow of remittances by the end of 2002 of nearly $10,000 million and a current account deficit of about 3.0% of GDP.