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.

Monetary Indicators	2020	2021	2022	2023	2024
Dominican Peso (DOP) - Average Annual Exchange Rate For 1 GBP	72.47	78.70	67.97	69.80	76.13

Source: World Bank - Latest available data.

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Latest Update: February 2026