Foreign trade and the generation of foreign currency are contracted by COVID-19
This is stated in the eighth “Panorama of foreign trade”, a quarterly publication of the Dominican Observatory of International Trade
SANTO DOMINGO. The most recent data on the evolution of the foreign trade reveal that the health crisis and confinement to prevent the spread of COVID-19 have had a severe effect on Dominican foreign trade. This is how the Foreign Trade Panorama number 8 of the Dominican Observatory of International Trade (ODCI).
According to this entity, while between January and March, the average value of the exports per month was 837 million, in April and May it fell until 601 million, for one reduction de 28%. The decline was observed both in national exports and in free zones.
The document points out that imports they also decreased, going from almost $ 1,560 billion per month, between January and March, until 1,157 million, for a 26% drop. Imports of consumer goods fell by 25%, raw materials by 21% and capital goods by 36%. Oil imports declined by 43% due to partial quarantine and lower international prices.
As a result of a larger drop in the value of imports that of exports, ODCI indicated that the balance of the balance of trade It fell from an average monthly deficit of $ 723 million between January and March, to one of 555 million in April and May.
For this entity, the evolution of the country's foreign trade in the months to come is uncertain because the increase in the number of infections could significantly delay the reopening process. However, it indicates that if the reopening progresses in the immediate future, it is foreseeable that trade flows will partially recover.
The entity projects that in 2020 the exports se will reduce in near 1,400 million compared to 2019, that imports fall by 2,400 million and that the balance of the trade balance is reduced by about a billion dollars.
For its part, according to the document, in 2020 tourism revenue could reach just over 2,300 billion dollars, about 4,800 billion less than in 2019. It is, therefore, a drastic drop in revenue from currencies and a serious challenge for the recovery of growth and the maintenance of macroeconomic stability.
The publication also provides a synthesis of the interventions made by representatives of the foreign exchange-generating sectors in the webinar "After COVID-19: Recovering Exports and Foreign Currency Generation" organized by the Instituto Tecnológico de Santo Domingo (INTEC) and ODCI in June. Representatives from tourism, free zones, national exporting companies and foreign investment companies, as well as the Ministry of Foreign Relations participated in the webinar.
The participants agreed that the recovery will not be quick and that it depends a lot on the international recovery. However, they called attention to the fact that it could be accelerated if the work is deepened and the collaboration between the government and the private sector is strengthened in the definition and adoption of effective health protocols in each sector, active international promotion and the use of gaps. Changes in the international context are opening, trade facilitation, digitization of activities in the public and private sectors and continuous improvement in the business climate.
The ODCI is a permanent academic-institutional space for research, capacity building, service provision and strategic communication on issues related to foreign trade and its socioeconomic, national and regional impacts.
It is made up of business associations such as the National Council of Private Enterprise (CONEP), the Association of Industries of the Dominican Republic (AIRD), the Dominican Association of Free Zones (ADOZONA) and the American Chamber of Commerce (AMCHAMDR), as well as public institutions linked to international trade such as the General Directorate of Customs (DGA), the Directorate of Administration and Commercial Treaties (DICOEX) of the Ministry of Industry, Commerce and MSMEs (MICM) and the National Council of Free Export Zones (CNZFE) , and INTEC as an academic ally.