Upturn What does the IMF report say about the Dominican Republic’s economy?

Santo Domingo – The Executive Board of the International Monetary Fund (IMF) acknowledged the resilience and rebound of the Dominican Republic’s economic activity, highlighting that it is supported by the authorities’ monetary and fiscal policies, as well as by credit, export, and tourism growth, which have improved in recent months.

The report forecasts growth of up to 4.5% in 2026, followed by convergence with its long-term trend of 5%.

These conclusions are offered at the conclusion of the Article IV consultation with the Dominican Republic, corresponding to 2025.

The document states that, following a slowdown in late 2024 and the first half of 2025, attributed to global uncertainty and tighter financial conditions, inflation remains close to the target of 4±1% and is expected to average 3.7% in 2025.

“The external position is in line with recommended economic fundamentals and policies. The current account deficit is expected to narrow further this year to 2.5% of GDP, supported by strong exports and remittances, and fully financed by foreign direct investment (FDI).”

In this regard, it states that “the government deficit and debt are projected on a gradually downward path,” driven by expected reductions in losses in the electricity sector and better targeting of electricity and fuel subsidies, which, in turn, will create fiscal space for the planned increase in public investment.

The Dominican Republic has strong economic fundamentals to face risks

The IMF also considered that the Dominican Republic is well-positioned to respond to external risks, including global financial conditions, heightened uncertainty, and natural disaster vulnerability.

The strengthening of policies and institutions was also praised, as it has led to solid macroeconomic performance over the past two decades.

In their conclusions, they urge the authorities to maintain prudent fiscal policies and support increased public investment, in accordance with the medium-term budgetary framework and the Fiscal Responsibility Act, and welcomed the projected fiscal consolidation, focused on revenue mobilization and improving the efficiency of public spending.

Electricity Pact

Emphasis was also placed on the need to fully implement the Electricity Pact to mitigate fiscal risks and ensure the sector’s resilience.