Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

June 12, 2018

Economic activity growth surged to a near two-year high at the start of Q2 on an upturn in construction, particularly thanks to residential, tourism and energy projects. This came after strong growth in Q1 due to the impact of greater monetary stimulus. Moreover, tourist arrivals rose at a solid pace in the first four months of 2018, while in the year to May private sector credit growth boomed and international reserves ticked up on robust FDI and remittances. Thanks to the strong economic performance, fiscal receipts are above budgeted estimates so far this year, boosting the administration’s chances of meeting its 2.2% fiscal deficit target. On 1 May, the government announced it had established diplomatic relations with China, which will likely drive up inward investment in the medium term.

Dominican Republic Economic Growth

Growth will be robust this year, although it will likely dip from Q1’s elevated pace. The economy should be buoyed by continuing strong credit provision and fiscal stimulus in the U.S., which will support remittances, exports and tourism activity. However, the fiscal deficit, elevated debt servicing costs and a narrow tax base pose concerns, which could become more pressing with higher oil prices and as global financial conditions tighten. Met the why particular panelists expect GDP growth of 5.0% 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)9.89.911.011.111.2
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 Rate49.610.80 %Jun 14
Exchange Rate49.610.80 %Jun 14

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