Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

October 13, 2020

Recent data suggests that the economy remained downbeat in Q3, although the performance was likely much improved from Q2’s coronavirus-induced collapse. Economic activity contracted sharply in July–August—albeit at a softer rate than in the second quarter—due to depressed activity in the hotels, bars and restaurants sector amid weak tourist arrivals. More positively, remittances surged in July and August owing to a stronger U.S. labor market, which should have supported private consumption somewhat. In politics, the government presented the draft 2021 budget to parliament in early October. Total spending is expected to fall sharply from 2020, as the government looks to rein in the fiscal shortfall and crisis-related expenditures ease, which will likely weigh on the recovery somewhat next year.

Dominican Republic Economic Growth

The economy will shrink sharply this year, amid prolonged domestic Covid-19 restrictions and a depressed tourism industry. Next year the economy should bounce back as the external sector recovers, although a possible lengthy pandemic, a slow recovery in tourist arrivals and instability in neighboring Haiti are risks to the outlook. FocusEconomics panelists see the economy shrinking 5.4% in 2020, before expanding 5.6% in 2021, which is unchanged from last month’s forecast.

Dominican Republic Economy Data

2015 2016 2017 2018 2019
Population (million)10.010.110.210.310.4
GDP per capita (USD)7,1397,5207,8698,3328,574
GDP (USD bn)71.275.880.085.588.9
Economic Growth (GDP, annual variation in %)6.96.74.77.05.1
Consumption (annual variation in %)6.55.53.95.24.8
Investment (annual variation in %)18.912.3-0.313.38.1
Industrial Production (annual variation in %)8.5-  -  -  -  
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-0.4-2.8-2.9-2.4-2.3
Public Debt (% of GDP)44.746.648.950.453.6
Money (annual variation in %)11.610.010.34.510.4
Inflation Rate (CPI, annual variation in %, eop)2.31.74.21.23.7
Inflation Rate (CPI, annual variation in %)0.81.63.33.61.8
Policy Interest Rate (%)5.005.505.255.504.50
Exchange Rate (vs USD)45.5346.3447.8050.2752.96
Exchange Rate (vs USD, aop)44.9845.9347.3149.6351.27
Current Account (% of GDP)-1.8-1.1-0.2-1.4-1.4
Current Account Balance (USD bn)-1.3-0.8-0.1-1.2-1.2
Trade Balance (USD billion)-7.5-7.6-7.6-9.3-9.1
Exports (USD billion)9.49.810.110.911.2
Imports (USD billion)16.917.417.720.220.3
Exports (annual variation in %)-4.64.23.07.62.9
Imports (annual variation in %)-2.12.91.914.00.4
International Reserves (USD)5.36.06.87.68.8
External Debt (% of GDP)37.537.339.039.6-  

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Dominican Republic Facts

Value Change Date
Exchange Rate52.960.80 %Jan 01

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