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 country’s economic growth has been one of the strongest in the LAC region over the past 25 years. However, it grew by only 4.6 percent in 2017, down from an average annual rate of 7.1 percent in 2014–16. Sustained by strong domestic demand, the GDP is expected to grow close to 5 percent in 2018 and maintain this rate in the near future.
The poverty rate fell from 32 percent in 2015 to 30 percent in 2016 according to official estimates. It is expected to continue declining at a slower pace than in the past as GDP growth softens. The government has allocated 4 percent of GDP to the education sector every year since 2013. However, social spending in the Dominican Republic remains low compared to the rest of the region. More efforts are also needed to improve public financial management as public debt continues to rise and remain sensitive to external shocks.
According to the World Bank Group’s Doing Business 2018, the Dominican Republic reduced the time to start a business and improved the reliability of electricity supply. Despite improvements in the ease of 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.
Last Updated: Mar 26, 2018