Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

February 13, 2018

A looser monetary stance and robust fiscal support were instrumental drivers of the economy’s solid performance in the fourth quarter. Annual GDP growth accelerated from 3.0% in Q3 to 6.5% in Q4 as increased liquidity and cheaper credit fueled stronger capital outlays and private spending growth. Solid remittance inflows and a recovery in tourism operations following hurricane-induced disruptions in late Q3 also likely contributed strongly to the reading. Increased government support was particularly noticeable in the construction sector, where activity expanded an impressive 15.3% in Q4 following a 5.4% increase in Q3. Meanwhile, the external sector closed the year on a strong note, with the current account deficit shrinking to its smallest in 13 years last year amid healthy growth in FDI, remittances and tourism revenues. Upbeat developments in the balance of payments led the Central Bank to raise international reserves last year to the highest figure on record.

Dominican Republic Economic Growth

The economy will likely grow at a largely steady clip this year due to monetary stimulus and solid remittance inflows. That said, faster fixed investment and private consumption growth should support import growth, weighing on GDP figures. Government spending growth is expected to moderate this year as authorities commit to fiscal prudence. FocusEconomics panelists expect GDP growth of 4.5% in 2018, which is unchanged from last month’s forecast. For 2019, panelists see the economy expanding 4.4%.

Dominican Republic Economy Data

Population (million)10.110.310.410.510.6
GDP per capita (USD)5,9966,0556,2966,4996,766
GDP (USD bn)60.862.165.368.271.8
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)0.1-0.310.520.811.1
Industrial Production (annual variation in %)-1.79.814.88.5-  
Unemployment Rate14.715.014.514.013.3
Fiscal Balance (% of GDP)-5.4-2.8-2.6-2.5-2.8
Public Debt (% of GDP)32.237.937.235.437.4
Money (annual variation in %)9.110.910.311.610.0
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
Exchange Rate (vs USD)40.4042.6944.2845.5346.34
Exchange Rate (vs USD, aop)39.2441.7143.4844.9845.93
Current Account (% of GDP)-6.5-4.1-3.3-1.9-1.4
Current Account Balance (USD bn)-4.0-2.5-2.0-1.3-1.0
Trade Balance (USD billion)-8.7-7.4-7.4-7.5-7.6
Exports (USD billion)
Imports (USD billion)17.816.817.316.917.5
Exports (annual variation in %)
Imports (annual variation in %)2.0-5.42.9-2.13.4
International Reserves (USD)
External Debt (% of GDP)31.033.635.233.9-  

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Dominican Republic Facts

Exchange Rate49.020.80 %Feb 14

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