Ng Cortiñas warns Israel-Iran conflict could hit Dominican economy hard

Santo Domingo.- Economist Haivanjoe Ng Cortiñas warned that the escalating conflict between Israel and Iran could significantly impact the Dominican economy by driving inflation higher and weakening the peso. The global effects of the conflict are already evident in the rising price of WTI crude oil, which jumped from US$62 to US$73 per barrel, triggering concerns about increased costs in transportation, food production, and supply chains.

Ng Cortiñas highlighted that the Dominican Republic, which relies on imported energy for 84% of its needs, is especially vulnerable. A prolonged conflict could lead to an oil bill increase of at least US$420 million, pushing the annual total to over US$5.1 billion. This would place serious pressure on the country’s fiscal health, trade balance, inflation, and currency stability.

He projected that if the conflict continues, inflation in the Dominican Republic could rise between 4.36% and 5.04% by the end of 2025—surpassing the government’s target—even with ongoing fuel and electricity subsidies. The economist also warned of potential hikes in bank interest rates, reduced investment, and further depreciation of the peso, as Dominicans turn to the U.S. dollar to shield themselves from inflation.