Economic Overview

The Dominican Republic has the second largest economy in Central America and the Caribbean.

 

The Dominican Republic has long been viewed primarily as an exporter of sugar, coffee, and tobacco, but in recent years the service sector has overtaken agriculture as the economy's largest employer, due to growth in tourism, telecommunications, and free-trade zones manufacturing.

 

The economy is highly dependent upon the US, the destination for nearly 75% of exports. Other markets include Canada, Western Europe and Japan. Remittances from the US amount to about a tenth of GDP, equivalent to almost half of exports and three-quarters of tourism receipts.

 

From 1996 to 2000, Dominican economic growth was accompanied by a series of economic reforms initiated by President Leonel Fernandez Reyna, thus expanding at an average rate of 7.7% per year and achieving macroeconomic stability, namely reducing the budget deficit, restraining money supply and eliminating inflation, abolishing price controls, and reverting the anti-export bias of the economy. Policies geared towards increasing FDI (Foreign Direct Investment) have been especially effective, and these combined with current growth and economic stabilization policies have boosted investor confidence in the country. Domestic investment has consistently been high.

 

The growth of the Dominican Republic's economy slowed in 2008-2009 because of the global recession, but still remained one of the fastest growing in the region. The growth of Dominican economy has developed primarily due to a well-managed tourist flow and flourishing agricultural industries.

 
The Dominican Republic has a trade agreement with the United States known as the Central America-United States Free Trade Agreement (CAFTA-DR) and an economic agreement with the European Community known as the Economic Partnership Agreement (EPA). Both trade agreements provide free access to those markets for the goods produced in the Dominican Republic.
 
An important aspect of the Dominican economy is the Free Trade Zone industry (FTZ), which made up U.S. $4.55 billion in Dominican exports for 2006 (70% of total exports).
 

In the Dominican Republic you will find the world famous hand-made Cigars, the exquisite mountain inorganic Coffee from Polo, Barahona and the strong but delicious Dominican Beers as well as Rums made from sugar cane.

 

“The Dominican Republic is more than just an investment destination or an excellent tropical producer. It is not only beautiful but competitive as well, not only enjoyable but profitable, not only evocative but livable. It is a welcoming nation, a country of contrasts, landscapes and colors, with friendly and easygoing people. Its human capital is one of the main reasons why more than 4.1 million tourists feel at home here and almost always want to return.

 

Welcome to the birthplace of the Americas and the place that we hope will soon become your next business destination”.

 

By Editor Elena Marin

 
 

Dominican Economical Facts

GDP (current US$ m): 51, 6 billion
GDP growth (annual %): 4.2%
GDP per capita (current US$ m): 18,245
GNI per capita (current US$ m): 5,030
Exchange rate (av) Ps: US$ 36.87
Real GDP growth rate: 7.8%
Real domestic demand growth: 8.1
Inflation (annual %): 6.3
Current-account balance (% of GDP): -6.5
FDI inflows (% of GDP): 4.2
Currency: 1 peso (Ps) = 100 centavos;
Average exchange rates in 2010:
Ps36.9: US$1 / Ps48.9: €1
Export Partners: USA 78.8%, South Korea 2.4%, Holland 2.2%
Import Partners: USA 44.9%, Venezuela 14.6%, Colombia 5%, México 4.9%, Puerto Rico, Spain, Japan, Germany
 
 

Real GDP Growth

 

Origin of GDP

 
     
 
   

Agriculture

 

Industry

 

Services

   

(*) Estimate Source: International Monetary Fund (IMF)

 
 

Risk Assessment

Overview – February 1st 2011

Sovereign Risk Currency Risk Banking Sector Risk Political Risk Economic Structure Risk Country Risk
B B B BB B B

Source: Economist Intelligence Unit

 
 

Foreign Currency Government Bond Ratings

STANDARD & POOR’S

B/POSITIVE/B

MOODY’S RATING

B1

MOODY’S OUTLOOK

STABLE

 
 

Business Environment

  • Strong macro-economic and political stability
  • Abundant, well qualified workforce
  • Excellent telecommunications infrastructure
  • Highly developed banking and insurance systems
  • Risk-free Free Zone operations
  • Attractive Taxation and financial incentives
  • Increasing labor productivity
  • Strategic geographical position 
 
 

Public Debt (% of GDP)

 

Inflation

 

(*) Estimate Source: International Monetary Fund (IMF)

 
 

Latin America Economic Performance GDP Growth Rate 2011