SANTO DOMINGO.- Central banker Hector Valdez Albizu yesterday said the economy will grow 5 percent this year, well above the Dominican population growth.

He said after the Gross Domestic Product posted a 7.5% increase in the first half,  reached 5.4% from January to September, despite the effects of the external shock. Communications grew 15.7 percent, financial intermediation and insurance 14% and energy and water 11%, he said.

Retail business also grew 10.1% and construction 5.3%, after growing 10% in the first half.

Valdez said agriculture declined 8%, blamed on the six tropical storms since last year, two at the end of 2007 and four between August and September this year.

The official, speaking at the Central Bank’s 61st anniversary, noted that the consumer price index in nine months was 10.76%, reaching double digits for the first time, in line with other countries in the region. He said these inflation levels result of the external shock’s effect as international prices jumped more than 72.5%.

Valdez said remittances totaled US$2.33 billion, or 5.1% higher than last year and earnings from tourism topped US$ 3.3 billion. Both figures are US$265 million more than the revenue in the same year ago period.

He affirmed the financial system’s indicators are strong; the exchange rate remains stable; there was a positive outcome of the current account, and the Central Bank’s quasi-fiscal deficit remains within expectations, despite higher interest rates.

Obstacles and Challenges

Valdez said the Central Bank is willing to take on the challenges and the actions needed to maintain confidence and macroeconomic stability, and called on the joint effort of all sectors.

"There’s no better proof of progress of a civilization than the progress of cooperation,” the Central banker said, quoting the English philosopher John Stuart Mill.