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Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for the Dominican Republic[1] on November 12, 2025. The authorities need more time to consider the publication of the Staff Report prepared for this consultation.[2]

The Dominican Republic’s (DR) growth slowed in late 2024 and the first half of 2025 largely due to increased uncertainty and tighter financial conditions. There are preliminary signs that economic activity is reviving, with credit, exports, and tourism growth all picking up in recent months, underpinned by supportive monetary and fiscal policies. Inflation remains close to target and is expected to average 3.7 percent in 2025. External balances are in line with fundamentals and desirable policies. The current account deficit is expected to narrow further this year to 2.5 percent of GDP, on the back of robust exports and remittances, and is fully financed by foreign direct investment (FDI).

Growth is expected to accelerate to 4.5 percent in 2026 then converge to its long-term trend of 5 percent, while inflation is forecast to remain around the 4 percent ± 1p.p target. The current account deficit is expected to remain around 2½ percent and continue to be fully financed by FDI. The government’s deficit and debt are projected to gradually decline, in part due to the expected reduction of electricity sector losses and improved targeting of energy subsidies. This will also help to create space for planned increases in public investment.

The balance of risks is tilted to the downside, but the DR is well-positioned to weather them. External risks from global financial conditions and heightened uncertainty remain, as does the DR’s vulnerability to natural disasters. But the DR has strong economic fundamentals and policy space to respond should these risks materialize. On the upside, the DR could benefit from trade diversion and FDI inflows stemming from changes in global trade policies. Domestically, delays in implementing the authorities’ reform and public investment plans could pose a downside risk to growth, while robust implementation would create upside “risks” to growth.

 

Executive Board Assessment[3]

Executive Directors commended the Dominican Republic’s sustained efforts to strengthen policies and institutions and advance business‑friendly reforms, driving the strong macroeconomic performance over the past two decades. Directors welcomed that growth is expected to accelerate and inflation remain well‑anchored. They agreed that while downside risks persist, the country is well positioned to absorb shocks, given its strong fundamentals and policy space. Notwithstanding the strong fundamentals, Directors encouraged the authorities to continue with their prudent policies and steadfast implementation of the reform agenda to accelerate growth and enhance resilience.

Directors encouraged the authorities to maintain prudent fiscal policies and support increased public investment, in line with the medium‑term fiscal framework and Fiscal Responsibility Law. They welcomed the planned consolidation, focused on revenue mobilization and improving spending efficiency, including by removing generalized subsidies while safeguarding necessary social spending. A well‑communicated medium‑term revenue strategy could help lay the groundwork for broader fiscal reform. Directors noted that full implementation of the Electricity Pact is essential to limit fiscal risks and ensure resilience.

Directors concurred that the monetary policy stance is broadly appropriate. They underscored that strengthening the monetary transmission mechanism would help to reinforce the effectiveness of the inflation targeting framework. Accordingly, Directors encouraged efforts to advance a comprehensive and clearly communicated strategy to gradually wind down exceptional liquidity measures. Furthering domestic financial markets development would also support policy transmission. Directors highlighted the need for continued exchange rate flexibility, with interventions focused on smoothing large shocks and rebuilding buffers to bolster external stability.

Directors noted that the banking system remains healthy and systemic risks are limited. They commended the progress on enhancing the financial sector supervisory and regulatory framework. The adoption of Basel II and III standards, development of a macroprudential policy toolkit, and strengthening of the AML/CFT framework remain key priorities.

Directors welcomed the ambitious structural reform agenda, aimed at boosting the country’s potential growth and achieving high‑income status as envisioned in the Meta2036 Plan. They noted that efforts to further improve governance, advance labor and social security reforms, and efficiently invest in infrastructure, education, and health are essential to achieve these goals. Noting the progress made, Directors concurred that the Dominican Republic’s high vulnerability to natural disasters requires a comprehensive approach to mitigating risks and building resilience. Important measures include enhancing the disaster risk management frameworks and deepening natural disaster considerations in fiscal policy.

 

 

 

Dominican Republic: Selected Economic Indicators
Population (millions, 2024)                                                     10.8		GDP per capita (2024, U.S. dollars)                        11,542
Quota                                   477.4 millions SDRs / 0.10% of total		Poverty (2023, share of population)                          23.0
Main exports                                            tourism, gold, tobacco		Extreme poverty (2023, share of population)             3.2
Key export markets                                   U.S., Switzerland, Haiti		Adult literacy rate (2021, percent)                             95.5
						Projection
	2020	2021	2022	2023	2024	2025	2026
Output	(Annual percentage change, unless otherwise stated)
Real GDP	-7.9	14.0	5.2	2.2	5.0	3.0	4.5
Nominal GDP (RD$ billion)	4,440	5,427	6,257	6,765	7,403	7,977	8,701
Nominal GDP (US$ billion)	78.6	95.1	113.8	120.8	124.6	…	…
Output gap (in percent of potential output)	-6.7	-1.9	-0.8	-1.8	-0.8	-1.7	-0.9
Prices
Consumer price inflation (end of period)	5.6	8.5	7.8	3.6	3.3	3.7	4.0
Exchange Rate
Exchange rate (RD$/US$ – period average) 1/	56.5	57.1	55.0	56.0	59.4	…	…
Exchange rate (RD$/US$ – eop) 1/	58.2	57.3	56.2	58.0	61.1	…	…
Real effective exchange rate (eop, – depreciation) 1/	-8.1	6.5	6.3	-1.9	-0.4	-1.7	0.0
Government Finances	(In percent of GDP)
Consolidated public sector debt 2/	71.4	61.8	58.8	59.7	58.1	59.2	58.2
Consolidated public sector overall balance 2/	-9.0	-3.7	-3.6	-4.1	-3.9	-4.5	-3.8
Consolidated public sector primary balance	-4.3	0.7	0.6	0.8	1.1	0.5	1.0
Non-Financial Public Sector (NFPS) balance	-7.6	-2.5	-2.7	-3.1	-3.2	-3.9	-3.2
Central government balance	-7.9	-2.9	-3.2	-3.3	-3.1	-3.4	-3.2
Revenues and grants	14.2	15.5	15.3	15.8	16.4	16.0	15.5
Primary spending	18.9	15.3	15.7	16.0	16.1	15.8	15.1
Interest expenditure	3.3	3.1	2.8	3.2	3.4	3.6	3.7
Rest of NFPS	0.3	0.4	0.6	0.2	-0.1	-0.5	0.0
Financial Sector	(Annual percentage change, unless otherwise stated)
Broad money (M3)	21.2	13.4	6.3	14.4	11.3	10.3	9.5
Credit to the private sector	5.3	11.6	16.6	19.7	13.5	12.3	12.6
Net domestic assets of the banking system	2.5	11.2	9.9	13.5	19.0	9.2	10.2
Policy interest rate (in percent) 1/	3.0	3.5	8.5	7.0	6.0	…	…
Average bank deposit rate (1-year; in percent) 1/	3.1	2.3	9.9	8.6	9.8	…	…
Average bank lending rate (1-year; in percent) 1/	9.9	9.2	13.5	13.6	15.1	…	…
Balance of Payments	(In percent of GDP)
Current account	-1.7	-2.8	-5.8	-3.7	-3.3	-2.5	-2.5
Goods, net	-8.7	-12.4	-15.1	-13.1	-12.8	-12.0	-11.4
Services, net	1.8	3.9	4.8	6.0	6.7	6.6	6.4
Income, net	5.2	5.7	4.5	3.5	2.7	2.9	2.6
Capital account	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial account 3/	5.3	5.7	6.7	5.2	2.4	3.3	2.8
Foreign direct investment, net	3.3	3.4	3.6	3.6	3.6	3.5	3.5
Portfolio investment, net	7.1	2.2	2.9	2.0	1.8	3.0	1.1
Financial derivatives, net	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other investment, net	-5.1	0.1	0.2	-0.4	-3.1	-3.2	-1.8
Change in reserves (-increase)	-2.5	-2.4	-1.3	-0.9	1.7	-0.8	-0.4
GIR (in millions of US dollars)	10,752	13,033	14,408	15,464	13,388	14,448	14,973
Total external debt (in percent of GDP)	56.6	47.8	39.9	43.2	43.7	45.7	45.2
of which: Consolidated public sector	40.4	35.3	33.2	34.2	34.6	36.0	35.3
Sources: National authorities; World Bank; and IMF staff calculations. 1/ Latest available. 2/ The consolidated public sector includes the budgetary central government (CG); the rest of the Non-Financial Public Sector, i.e., extra-budgetary central government institutions (decentralized and autonomous institutions), social security funds, local governments and non-financial public companies; and the quasi-fiscal central bank debt. 3/ Excluding reserves.

 

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] Under the IMF’s Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The authorities have not yet communicated their decision on the publication of the staff report.

[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.