{"id":15612,"date":"2025-02-04T22:42:58","date_gmt":"2025-02-04T22:42:58","guid":{"rendered":"https:\/\/central-law.com\/?p=15612"},"modified":"2025-02-04T22:42:58","modified_gmt":"2025-02-04T22:42:58","slug":"how-the-dominican-republic-achieved-the-second-highest-economic-growth-in-the-region-in-2024","status":"publish","type":"post","link":"https:\/\/central-law.com\/en\/how-the-dominican-republic-achieved-the-second-highest-economic-growth-in-the-region-in-2024\/","title":{"rendered":"How the Dominican Republic Achieved the Second-Highest Economic Growth in the Region in 2024"},"content":{"rendered":"

With a <\/span>5.1% growth rate<\/b>, the <\/span>Dominican Republic’s economy<\/b> ranked as the <\/span>second-fastest-growing in Latin America and the Caribbean in 2024<\/b>, surpassed only by <\/span>Guyana (43%)<\/b>, according to the <\/span>World Bank<\/b>.<\/span><\/p>\n

While the multilateral organization forecasts a <\/span>slowdown for 2025<\/b> compared to the previous year, the <\/span>best-performing economies will continue to be Guyana (12.3%) and the Dominican Republic (4.7%)<\/b>.<\/span><\/p>\n

The Dominican economy is expected to grow at an <\/span>average rate of 4.9% in 2025-2026<\/b>, driven by <\/span>structural reforms aimed at attracting foreign direct investment (FDI)<\/b>, according to the <\/span>World Bank<\/b>.<\/span><\/p>\n

In 2024, the <\/span>Central Bank of the Dominican Republic<\/b> estimated a <\/span>foreign currency inflow exceeding $43 billion<\/b>, with <\/span>tourism and remittances<\/b> serving as key pillars, each contributing around <\/span>$10.7 billion<\/b>.<\/span><\/p>\n

Last year, the <\/span>Caribbean nation reported over 11.1 million tourist arrivals<\/b>, marking a <\/span>48% increase compared to 2019<\/b>, according to the <\/span>Ministry of Tourism<\/b>.<\/span><\/p>\n

Meanwhile, <\/span>FDI is projected to reach $4.5 billion<\/b>, reflecting a <\/span>2.7% year-on-year growth<\/b>, while <\/span>exports from free trade zones<\/b> are expected to exceed <\/span>$8.5 billion<\/b>.<\/span><\/p>\n

Challenges for the Dominican Economy in 2025<\/b><\/h3>\n

According to <\/span>Miguel Collado Di Franco<\/b>, Executive Vice President of the <\/span>Regional Center for Sustainable Economic Strategies (CREES)<\/b>, based in <\/span>Santo Domingo<\/b>, <\/span>2025 presents challenges for the Dominican economy<\/b> due to the <\/span>need for structural reforms<\/b> that could <\/span>boost growth, job creation, and revenue<\/b>, while also reducing costs in <\/span>labor markets, fuel, land transportation, and electricity distribution<\/b>.<\/span><\/p>\n

Additionally, the country <\/span>must strengthen its institutional framework and legal security<\/b>. <\/span>“If these reforms are not implemented, we will remain highly dependent on external factors,”<\/span><\/i> he warned.<\/span><\/p>\n

The expert further emphasized that <\/span>fiscal policy in 2025<\/b> should aim to <\/span>break the vicious cycle of rising revenues and increased spending<\/b>, which leads to persistent <\/span>fiscal deficits financed through debt accumulation<\/b>. He pointed out that any <\/span>tax system reform<\/b> should ensure that <\/span>new revenues, combined with better expenditure management, lead to fiscal consolidation and, ultimately, debt reduction<\/b>.<\/span><\/p>\n

Economic Outlook for Central America and the Caribbean<\/b><\/h3>\n

According to the <\/span>World Bank<\/b>, economic growth in <\/span>Central America<\/b> is expected to <\/span>rise to 3.5% in 2025 and 2026<\/b>, supported by increased consumer spending. <\/span>Costa Rica\u2019s growth<\/b> is projected to <\/span>moderate to 3.5% in 2025 and 3.4% in 2026<\/b>, while <\/span>Panama<\/b>, driven by <\/span>service exports<\/b>, is expected to <\/span>rebound to 3% in 2025 and 3.5% in 2026<\/b>.<\/span><\/p>\n

Inflation across the subregion varies<\/b>. <\/span>El Salvador, Panama (both dollarized economies), and Costa Rica<\/b> are experiencing <\/span>inflation rates comparable to those in the United States<\/b>.<\/span><\/p>\n

Meanwhile, in <\/span>Guatemala, Honduras, and Nicaragua<\/b>, inflation has moderated compared to previous years, aligning more closely with central banks’ targets due to <\/span>restrictive monetary policies<\/b>.<\/span><\/p>\n

In the <\/span>Caribbean<\/b>, economic growth is expected to <\/span>remain strong<\/b>, with rates of <\/span>4.9% in 2025 and 5.7% in 2026<\/b>, following an estimated <\/span>7.7% surge in 2024<\/b>. This performance is largely driven by <\/span>Guyana\u2019s continued economic boom<\/b>, fueled by the <\/span>expansion of its newly developed oil extraction sector<\/b>.<\/span><\/p>\n

Excluding <\/span>Guyana<\/b>, growth across the <\/span>Caribbean subregion<\/b> is projected to <\/span>average 3.8% annually in 2025-2026<\/b>.<\/span><\/p>\n

Jamaica<\/b>, still recovering from the impact of <\/span>Hurricane Beryl<\/b>, is expected to grow by <\/span>2.2% in 2025<\/b>, before stabilizing at <\/span>1.6% in 2026<\/b>.<\/span><\/p>\n

Conversely, <\/span>Haiti<\/b>, which shares the island of <\/span>Hispaniola with the Dominican Republic<\/b>, faces <\/span>high uncertainty<\/b> due to ongoing <\/span>violence and political instability<\/b>.<\/span><\/p>\n

The country is expected to <\/span>emerge from recession<\/b> with a <\/span>modest 0.5% growth rate<\/b>, following a <\/span>4.2% contraction<\/b>, marking the <\/span>weakest economic performance in Latin America<\/b>.<\/span><\/p>\n

For more information or inquiries, please contact us at info@central-law.com<\/p>\n

Source: Bloomberg Linea<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

With a 5.1% growth rate, the Dominican Republic’s economy ranked as the second-fastest-growing in Latin America and the Caribbean in 2024, surpassed only by Guyana (43%), according to the World Bank. While the multilateral organization forecasts a slowdown for 2025 compared to the previous year, the best-performing economies will continue to be Guyana (12.3%) and 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