Dominican Republic
The Dominican Republic’s Emissions Reduction Program, with support from the World Bank, rewards forest conservation with payments that translate into training and new job opportunities, especially for women.
BY THE NUMBERS: DOMINICAN REPUBLIC
OVERVIEW: DOMINICAN REPUBLIC
The Dominican Republic (DR) is a country of nearly 11 million people, recognized for its resilient and hardworking population, as well as its rich natural and cultural assets. The DR is pursuing an ambitious goal to become a high-income nation by 2036. To achieve this, the country is mobilizing the private sector, creating quality jobs, and unlocking inclusive growth for a more sustainable and prosperous future.
Over the past twenty years, the DR’s economy has grown rapidly compared to the Latin American average. However, to ensure inclusive growth and reach its goal of becoming a high-income nation, the country must enhance productivity and create more quality jobs.
To support this objective, the proposed structural reforms focus on five key areas: strengthening human capital by aligning education with labor market needs and reducing inequalities; promoting competition by lowering entry barriers and revising regulations that favor established firms; incentivizing innovation through technology extension services, managerial capacity building, and targeted subsidies for SMEs; improving public spending efficiency and broadening the tax base by eliminating exemptions; and enhancing resilience to external shocks and climate events through fiscal risk strategies and flexible mitigation programs for institutions, businesses, and households.
These recommendations aim to unlock greater economic productivity, foster a more inclusive labor market, and encourage dynamic structural transformation that leverages the potential of marginalized areas and underserved populations. They also seek to establish a more efficient redistributive fiscal policy, with robust social assistance and protection measures. Central to this vision is the active engagement of the private sector as a key partner in driving innovation, expanding opportunities, and delivering sustainable impact.
Last Updated: Apr 8, 2026
The Dominican Republic's economic growth has significantly outpaced the regional average over the past two decades, lifting nearly 3 million people out of poverty. The middle class now exceeds the poor population, leading to improved quality of life in terms of access to basic services, housing, and education.
The economy grew by 2.1 percent in 2025, with projected expansions of 3.6 percent in 2026 and 4.4 percent in 2027. Medium-term growth will be driven by a rebound in private investment and construction, resilient private consumption supported by strong remittance inflows, and the solid performance of exports—particularly tourism and gold mining—alongside significant foreign direct investment (FDI) inflows.
To sustain this dynamic growth and extend its benefits to more households and impoverished areas, it is crucial to boost productivity through reforms to strengthen human capital, competitiveness, innovation, service delivery, public spending efficiency, and effective management of the growing debt.
The government has demonstrated a strong commitment to addressing the long-standing challenges in the electricity sector. This includes a comprehensive package of reforms designed to enhance transparency, accountability, and efficiency, continue diversifying the energy matrix to incorporate cleaner energy sources, and improve access to reliable and affordable energy. However, further work is needed in the transmission sector, historically facing economic losses.
The increasing frequency of extreme weather events underscores the urgent need for accelerated action to strengthen the country's resilience and adaptation efforts inclusively.
Capitalizing on new business opportunities, private sector solutions, and developing assets in key sectors such as logistics and financial services would enhance the Dominican Republic's attractiveness to competitive investors while gradually reducing dependence on fiscal incentives.
Last Updated: Apr 8, 2026
Additional operations include budget support for climate change, a water sector Program-for-Results, a Catastrophe Deferred Drawdown Option, and an Emissions Reduction Payment Agreement. Fiscal year 2025 funding encompasses a fiscal and sustainable development policy operation. The portfolio is further supported by analytical work in areas such as climate, economic performance, private sector development, and poverty alleviation.
The International Finance Corporation (IFC) has committed US$1.4 billion to the Dominican Republic over the past two decades, focusing on renewable energy, tourism, transport, financing for micro, small, and medium enterprises (MSMEs), and agribusiness. Advisory services enhance healthcare access and quality, financial inclusion, the electric sector, renewable energy, green taxonomy, financial derivatives, industrial parks, and high-value manufacturing.
The Multilateral Investment Guarantee Agency (MIGA) will collaborate closely with the IFC and the World Bank to improve the environment, develop public-private partnerships, and attract foreign private investment.
With the support of the World Bank Group, the Dominican Republic has made significant strides in key development initiatives, including the launch of the National Digital Health Strategy and the issuance of its first sovereign green bond. Other recent achievements include the Emergency Bond for families affected by Hurricane Fiona, the Green Taxonomy project, adaptive math learning technology, cash transfers to 1.3 million low-income households, and job training for over 27,000 youth, of whom 69% are women.
Last Updated: Apr 8, 2026
The first outcome seeks to improve access to high-quality public services. This includes enhancing fiscal space and public spending to ensure sustainable improvements.
The second outcome aims to create high-quality jobs by enhancing job skills and educational quality. This will strengthen the investment climate and diversify trade markets. A vital aspect of this effort will be mobilizing financing for underserved groups and infrastructure, particularly focusing on vulnerable households, especially those headed by women. Support will be provided through mortgage financing via the national housing program and increased lending to women and small and medium-sized enterprises to encourage public-private partnerships.
The third desired outcome of the CPF is to enhance the capacity to respond to and recover from the adverse effects of climate change. This will involve boosting the blue economy, improving water and natural resource management, and promoting landscape sustainability. Strengthening institutional and financial capacities is essential for better adaptation to natural phenomena. Additionally, facilitating green finance will play a critical role in these efforts.
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