Update on COVID-19 (as of May 13th, 2020):
The World Bank Group is working closely with partners to respond to the global pandemic in the Caribbean and around the world. For information on coronavirus and the global response, please visit: https://www.worldbank.org/en/who-we-are/news/coronavirus-covid19
The Dominican Republic received US$150 million from a contingent credit line in March. The World Bank stands ready to continue supporting our partners in the Dominican Republic and will provide updates on actions being taken.
The Dominican Republic (DR) has enjoyed strong economic growth in recent years, averaging 5.3 percent annually between 1993 and 2018, one of the fastest rates in the Latin America and the Caribbean (LAC) region. The pace accelerated to an average of 6.3 percent per year between 2014 and 2018 -- and 7 percent in 2018, fueled by robust domestic demand. It was the fastest-growing LAC economy over that five-year period.
The sustained growth has reduced poverty and inequality, helping to expand the middle class. Using the Latin America and the Caribbean regional poverty lines, poverty was reduced from 34.4 percent to 19.9 percent while the proportion of the middle class rose from 24 percent to 37 percent between 2008 and 2016, outnumbering the poor for the first time in 2014. However, the vulnerable population is the largest income group in the country (41 percent), with risks of falling back into poverty if a shock materializes. The official national poverty rate fell from 22.8 percent in 2018 to 21.0 percent in 2019, with more than 2 million people in poverty. The Gini coefficient decreased by 2.5 points from 49.6 in 2008 to 47.1 in 2016 and is below regional inequality levels throughout the period. Lack of access to quality infrastructure is strongly correlated with poverty at the provincial level. Between 2000 and 2016, there was a notable expansion in sanitation, especially in rural areas. However, improved access to services is often not correlated with improved quality.
If the DR wants to achieve its goal of becoming a high-income country by 2030, it must improve the fiscal balance, build its human capital, promote a better business environment, enhance management of natural resources, improve resilience to disasters and climate-related risks, and increase policy-making transparency and accountability.
Building on the long-term National Development Strategy (Vision 2030), the government drafted the 2016-2020 Government Plan at the start of its second term. Presidential and congressional elections are scheduled to be held in July 2020.
The government has doubled education spending as a percentage of GDP since 2013 and implemented a series of reforms to improve learning outcomes. The government has also joined the World Bank’s Human Capital Project, which provides a platform for countries to share experiences of improving human capital outcomes. These decisions — together with the choice to take part in the OECD’s Programme for International Student Assessment (PISA) in 2015 and 2018 — are important steps toward tackling the barriers to human capital development. According to the Human Capital Index (HCI), a child born in the DR today will be 49 percent as productive when they grow up as they could be if they received a complete education and proper healthcare, so much progress remains to be made.
Nevertheless, the COVID-19 (novel coronavirus) outbreak is challenging the Dominican Republic’s ability to maintain stable economic growth and continued poverty reduction due to the local, regional, and international impacts of the pandemic. The major slowdown in the global economy poses risks given the DR’s dependence on international tourism and exports. Domestically, the crisis is impacting both formal and informal employment and heightening vulnerabilities of the already vulnerable population.
Last Updated: May 13, 2020