Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

July 10, 2018

The economy grew at an impressive rate in Q2, according to recent indicators. Elevated economic activity growth in the first two months of the quarter was driven by manufacturing in duty-free zones, construction and commerce, with the economy benefitting from robust private sector credit growth and lower average interest rates. In addition, tourist arrivals were solid in May on greater inflows from North America. On the fiscal front, the non-financial public sector posted a small surplus in the year to May, while tax revenues exceeded expectations. This comes after growth surged in the first quarter, buoyed by monetary stimulus introduced from the middle of last year.

Dominican Republic Economic Growth

Growth is set to be the joint-strongest in the region this year. The economy should be buoyed by continuing robust credit provision and fiscal stimulus in the U.S., which will boost remittances, exports and tourism activity. However, elevated debt servicing costs and a narrow tax base pose downside risks, which could become more pressing with higher oil prices and as global financial conditions tighten. FocusEconomics panelists expect GDP growth of 5.1% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, panelists see the economy expanding 4.4%.

Dominican Republic Economy Data

20132014201520162017
Population (million)9.89.910.010.110.2
GDP per capita (USD)6,4106,6936,9037,1887,475
GDP (USD bn)62.766.268.972.476.0
Economic Growth (GDP, annual variation in %)4.97.67.06.64.6
Consumption (annual variation in %)2.63.85.34.84.7
Investment (annual variation in %)-2.512.320.611.40.5
Industrial Production (annual variation in %)9.814.88.5-  -  
Unemployment Rate15.014.514.013.3-  
Fiscal Balance (% of GDP)-3.3-2.70.0-2.8-3.0
Public Debt (% of GDP)37.036.035.136.938.9
Money (annual variation in %)10.710.511.610.010.3
Inflation Rate (CPI, annual variation in %, eop)3.91.62.31.74.2
Inflation Rate (CPI, annual variation in %)4.83.00.81.63.3
Policy Interest Rate (%)6.256.255.005.505.25
Exchange Rate (vs USD)42.6944.2845.5346.3447.80
Exchange Rate (vs USD, aop)41.7143.4844.9845.9347.31
Current Account (% of GDP)-4.1-3.3-1.9-1.1-0.2
Current Account Balance (USD bn)-2.6-2.2-1.3-0.8-0.2
Trade Balance (USD billion)-7.4-7.4-7.5-7.6-7.6
Exports (USD billion)9.49.99.49.810.1
Imports (USD billion)16.817.316.917.417.7
Exports (annual variation in %)5.55.0-4.64.22.9
Imports (annual variation in %)-4.82.8-2.12.91.7
International Reserves (USD)4.74.95.36.06.8
External Debt (% of GDP)38.239.738.738.7-  

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Dominican Republic Facts

ValueChangeDate
Exchange Rate49.850.80 %Jul 17

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