The Dominican Republic has enjoyed strong economic growth in recent years and a significant reduction in poverty, although the country remains vulnerable to natural disasters such as hurricanes and earthquakes.
The Dominican Republic’s economic growth has been one of the strongest in the LAC region over the past 25 years. In the first quarter of 2017, the economy expanded by 5.2 percent, following yearly average growth of 7.1 percent between 2014-16. This contrasted sharply with that of the average 1.4 percent contraction for the LAC region in 2016.
The share of Dominicans living in poverty (about 152 Dominican pesos a day) fell sharply from 42.2 percent in 2012 to 30.5 percent in 2016, according to official estimates. Yet, social spending in the DR remains low compared to the rest of the region. On average, total health spending in the DR increased from roughly 2.2% of GDP in 2000 to 2.9% in 2014, compared to the regional average of 3.7%. However, the Government remains committed to allocate every year 4% of GDP to the education sector.
According to the World Bank Group’s Doing Business 2017, the Dominican Republic made getting an electricity connection faster and paying taxes less costly. However, despite improvements in doing business, further reforms are needed to improve the country’s competitiveness.
Better water and electricity services are also needed to support growth in tourism, agriculture and manufacturing. While debt levels continue to rise, debt trajectory remains sustainable and progress has been made in recent years, including in diversifying financing sources.
Last Updated: Sep 29, 2017