flag Dominican Republic Dominican Republic: Economic Outline

Economic Indicators

The Dominican Republic has consistently ranked among the fastest-growing economies in Latin America and the Caribbean, boasting an average growth rate of 5.4% from 2005 to 2022. However, after a robust recovery in 2022, GDP growth slowed to 2.4% in 2023. The construction sector faced notable challenges in the first half of the year, experiencing a slowdown due to increased borrowing costs and input prices. On the other hand, service sectors like hospitality and healthcare expanded by 10.7% and 10%, respectively, helping to offset the earlier sluggishness in the construction sector. According to the World Bank, in 2024, economic growth is projected to accelerate to 5.1%, driven by the delayed impacts of monetary policy easing and increased public investment. Over the medium term, strong consumption and investment are anticipated to support growth, reinforced by the implementation of structural reforms in critical sectors like energy, water, and public-private partnerships. Additionally, initiatives focused on enhancing education and attracting Foreign Direct Investment (FDI) are expected to contribute to sustained growth.

In 2023, the fiscal deficit widened to 3.3% of GDP, up from 3.2% in 2022. Total revenue surged by 12.2%, fueled by improvements in tax administration and exceptional revenue from advanced corporate income tax payments. Expenditures rose by 11.1% year-over-year, driven by a significant 21.0% increase in public investment and a 19.9% rise in interest payments. Over the medium term, a gradual fiscal consolidation is anticipated, led by ongoing Electricity Pact reforms, the phasing out of untargeted subsidies, and efficiency measures in spending such as procurement and social program consolidation. Consequently, the public debt-to-GDP ratio is expected to progressively decrease, maintaining a level below 57% post-2026. Inflation steadily declined throughout 2023, reaching 3.6% year-over-year in December, falling within the central bank's target band of 4% ± 1%. In November 2023, the Central Bank reduced its policy rate from 8.5% to 7.0%. Continued easing of inflationary pressures is anticipated, potentially leading to further interest rate cuts by the central bank. The macroeconomic outlook is vulnerable to both external and domestic risks. A slowdown in the US economy, exceeding expectations, could negatively impact tourist arrivals and exports. Weather-related events like El Niño could severely affect agriculture and tourism, disproportionately impacting the poor. Climate-induced deviations from the GDP baseline could potentially reach up to 16.7% of GDP by 2050. Given the high exposure to external shocks and limited financial safeguards, significant fiscal and financial risks are present. Thus, strengthening resilience is crucial to sustaining economic growth and promoting inclusivity.

In 2023, the economy saw the creation of approximately 148,000 new jobs, representing a year-over-year growth of 3.2%, significantly surpassing pre-pandemic figures. This employment rebound was propelled by a 5.6% year-over-year increase in formal employment, notably among women, who accounted for the creation of 65,142 new jobs. Overall, the World Bank estimated an unemployment rate of 5.6%. During 2023, the poverty rate, measured at USD 6.85 per day (2017 PPP), decreased to 19%, lower than the pre-pandemic level of 20% in 2019. The primary driver behind this poverty reduction was the growth in labor incomes, supported by public transfers.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 113.87120.63127.91137.34147.54
GDP (Constant Prices, Annual % Change) 4.93.05.25.15.0
GDP per Capita (USD) 10,71111,24911,82512,58713,405
General Government Balance (in % of GDP) -3.7-4.0-3.9-3.5-3.4
General Government Gross Debt (in % of GDP) 59.559.859.458.457.4
Inflation Rate (%) n/a4.94.24.04.0
Current Account (billions USD) -6.33-4.46-4.54-4.59-4.52
Current Account (in % of GDP) -5.6-3.7-3.5-3.3-3.1

Source: IMF – World Economic Outlook Database - October 2021.

Note: (e) Estimated Data


 
Monetary Indicators 20162017201820192020
Dominican Peso (DOP) - Average Annual Exchange Rate For 1 GBP 62.2161.2466.0564.1372.47

Source: World Bank - Latest available data.

 

Main Sectors of Industry

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 8.3 20.3 71.4
Value Added (in % of GDP) 5.8 33.1 54.4
Value Added (Annual % Change) 5.0 1.4 8.1

Source: World Bank - Latest available data.

 
Socio-Demographic Indicators 2024 (e)2025 (e)2026 (e)
Unemployment Rate (%) 6.06.06.0

Source: IMF – World Economic Outlook Database - Latest available data

 

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The Active Population in Figures

201820192020
Labour Force 5,029,4285,199,1034,858,960

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 67.92%69.84%71.05%
Men activity rate 81.33%83.22%83.66%
Women activity rate 54.57%56.52%58.49%

Source: International Labour Organization, ILOSTAT database

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
62,1/100
World Rank:
88
Regional Rank:
17

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.20/10
World Rank:
67/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
3/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
50/180

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Sources of General Economic Information

Main Online Newspapers and Portals
Dominican Today
Al Momento (in Spanish)
CDN (in Spanish)
El Día (in Spanish)
El Nacional (in Spanish)
Useful Resources
Ministry of Finance
Ministry of Foreign Affairs
Ministry of Public Administration
Ministry of Industry, Commerce and MSMEs
Central Bank of the Dominican Republic
 
 

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Latest Update: May 2024

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