Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

October 9, 2018

The economy continues to perform well so far in H2. Economic growth was rapid in July, supported by retail, mining and quarrying, and manufacturing in duty-free zones. Moreover, tourist arrivals were up year-on-year in July and August—likely supported by the strong U.S. labor market—while private credit growth remained in double-digits in September, despite moderating due to recent monetary tightening. Robust economic growth has boosted tax revenues, which grew markedly in the year to July. Coupled with constrained public spending, this has helped the government strengthen its fiscal position so far this year. This comes after a stellar economic expansion in H1, underpinned by a surge in fixed investment and buoyant private consumption. On 28 September, the government presented its 2019 budget to Congress, which aims to shrink the budget deficit through improved tax collection, while simultaneously increasing social spending.

Dominican Republic Economic Growth

Growth will likely moderate slightly going forwards after several quarters of above-potential readings but should still compare favorably to regional peers. Strong fixed investment and spillovers from the expansion in the U.S. economy, which should continue to fuel remittances, exports and tourism activity, are expected to drive the economy. Downside risks stem from higher oil prices, tighter international financial conditions and elevated debt servicing costs. Met the why particular panelists expect GDP growth of 5.5% in 2018. For 2019, panelists see the economy expanding 5.0%, which is up 0.3 percentage points from last month’s forecast.

Dominican Republic Economy Data

20132014201520162017
Population (million)9.89.911.011.111.2
GDP per capita (USD)6,4116,6936,9037,1887,475
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 %)11.711.511.611.011.3
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)9.49.99.49.811.1
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 Rate50.020.80 %Oct 18

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