Hormuz tensions could impact Dominican economy, INTEC warns

Santo Domingo.- Rising geopolitical tensions in the Strait of Hormuz could significantly impact the Dominican Republic’s economy, according to an analysis by the Technological Institute of Santo Domingo (INTEC). The report warns that disruptions in this key global energy corridor—through which nearly a quarter of the world’s oil passes—could drive up fuel prices, increase logistics costs, and intensify inflationary pressures.

Given the country’s high dependence on energy imports, the effects would be quickly felt through higher fuel costs, more expensive imported goods, and tighter global financial conditions. The study estimates that a US$10 rise in oil prices could increase inflation by up to 0.7%, weaken the current account, and slow economic growth by as much as 0.3 percentage points. Key sectors such as tourism and remittances could also be affected by a broader global slowdown.

The report also highlights potential fiscal strain, as the government may need to increase electricity subsidies to cushion the social impact of rising energy costs. This could pressure public finances and require policy adjustments to maintain economic stability.

However, the analysis points to opportunities amid the crisis, including accelerating renewable energy development, strengthening the country’s role as a regional logistics hub, and attracting nearshoring investments. INTEC emphasized the need for long-term planning, energy diversification, and stronger institutional capacity to manage external shocks, aligning with calls from President Luis Abinader for a national strategy to address global economic risks.