Dominican Republic

Dominican Republic Economic Forecast

Dominican Republic Economic Outlook

The economy ended 2022 with a bang: Annual economic activity growth accelerated to 3.3% in December. However, the upturn was not enough to pull Q4’s average growth above that of the prior three months. Turning to this year, activity has cooled so far. Economic growth waned to 0.4% year on year in January—the weakest rate in two years—but this was due in no small part to an unfavorable base effect. Moreover, in sequential terms, activity declined at the steepest pace in 33 months in January. More positively, in January–February, price pressures continued to recede and the Central Bank kept rates unchanged. These developments, coupled with remittances increasing at the strongest annual pace in two years during January, should have aided spending. The external sector, meanwhile, fared well at the outset of the year, with tourist arrivals up year on year in January.

Dominican Republic Inflation

In February, inflation cooled to an over two-year low of 6.4% (January: 7.2%). Softer increases in food and transport prices drove the moderation. Slower economic growth, due in part to contractionary monetary policy, will continue to put downward pressure on inflation for the remainder of the year. It will remain above the Central Bank’s 3.0–5.0% target, however.

Dominican Republic Economic Data

2017 2018 2019 2020 2021
Population (million) 10.2 10.3 10.4 10.4 10.5
GDP (USD bn) 80.4 85.4 89.0 78.9 94.6
GDP per capita (USD) 7 8 8 7 8
GDP (DOP bn) 3 4 4 4 5
Economic Growth (Nominal GDP, ann. var. %) 9.0 11.4 7.7 -2.3 21.0
Economic Growth (GDP, ann. var. %) 4.7 7.0 5.1 -6.7 12.3
Total Consumption (ann. var. %) 3.9 5.2 4.8 -2.4 5.6
Private Consumption (ann. var. %) 4.4 5.7 4.6 -3.4 6.6
Government Consumption (ann. var. %) 0.8 2.8 6.3 4.9 0.1
Fixed Investment (ann. var. %) -0.3 13.3 8.1 -12.1 22.1
Exports (G&S, ann. var. %) 4.9 6.1 1.5 -30.3 36.2
Imports (G&S, ann. var. %) -3.0 8.5 5.8 -14.6 24.7
Unemployment (% of active population, aop) 5.5 5.7 6.2 5.8 7.4
Fiscal Balance (% of GDP) -2.8 -2.3 -2.3 -7.6 -2.5
Public Debt (% of GDP) 48.9 50.5 53.6 71.5 63.1
Money (ann. var. of M2 %) 10.3 4.5 10.4 16.0 15.3
Inflation (CPI, ann. var. %, eop) 4.2 1.2 3.7 5.6 8.5
Inflation (CPI, ann. var. %, aop) 3.3 3.6 1.8 3.8 8.2
Key Policy Rate (%, eop) 5.25 5.50 4.50 3.00 4.50
Exchange Rate (DOP per USD, eop) 47.8 50.3 53.0 58.2 57.5
Exchange Rate (DOP per USD, aop) 47.3 49.6 51.3 56.5 57.0
Current Account Balance (USD bn) -0.1 -1.3 -1.2 -1.3 -2.7
Current Account Balance (% of GDP) -0.2 -1.5 -1.3 -1.7 -2.8
Merchandise Trade Balance (USD bn) -7.6 -9.6 -9.1 -6.8 -11.7
Merchandise Exports (USD bn) 10.1 10.6 11.2 10.3 12.5
Merchandise Imports (USD bn) 17.7 20.2 20.3 17.1 24.1
Merchandise Exports (ann. var. %) 3.0 5.0 5.2 -8.0 21.0
Merchandise Imports (ann. var. %) 1.9 13.9 0.3 -15.6 41.1
Foreign Direct Investment (USD bn) 3.6 2.5 3.0 2.6 3.1
International Reserves (USD bn) 6.8 7.6 8.8 10.8 13.0
International Reserves (months of imports) 4.6 4.5 5.2 7.5 6.5
External Debt (USD bn) 29.5 31.9 34.2 40.3 43.7
External Debt (% of GDP) 36.6 37.3 38.4 51.0 46.2

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