Dominican Republic Economic Forecast

Domin. Rep. Economic Outlook

August 7, 2018

The economy continued to surge in Q2, underpinned by double-digit expansions in the duty-free manufacturing and construction sectors, and a solid performance in the commerce sub-sector. Strong economic activity in recent quarters translated into healthy year-on-year formal employment growth in Q1 and a lower unemployment rate. Moreover, the number of tourist arrivals expanded robustly in Q2, while fiscal receipts increased by nearly 15% in the year to May. On the other hand, the external sector has weakened so far this year: Higher oil prices pushed up the import bill and led the trade deficit to widen. On 12 July, the country issued USD 1.3 billion in international bonds. This should bolster international reserves—which dipped notably in recent months—and help satisfy dollar demand.

Dominican Republic Economic Growth

Growth will likely dip going forward but remain healthy, supported by fixed investment and a strong U.S. economy, which will boost remittances, exports and tourism activity. However, tighter monetary policy will dampen activity. The vulnerable fiscal position, with elevated debt servicing costs and a narrow tax base, poses a downside risk. Met the why particular panelists expect GDP growth of 5.2% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, panelists see the economy expanding 4.5%.

Dominican Republic Economy Data

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 %)
Consumption (annual variation in %)
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)
Money (annual variation in %)11.711.511.611.011.3
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Policy Interest Rate (%)
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)
Imports (USD billion)16.817.316.917.417.7
Exports (annual variation in %)5.55.0-
Imports (annual variation in %)-4.82.8-
International Reserves (USD)
External Debt (% of GDP)38.239.738.738.7-  

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Dominican Republic Facts

Exchange Rate49.860.80 %Aug 07

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