Economy of the Dominican Republic

"Dominican economy" redirects here. For economy of the Commonwealth of Dominica, see Economy of Dominica.

Economy of Dominican Republic
Santo Domingo is the capital and financial center of the Dominican Republic
Currency1 Dominican Peso (RD$) = 100 Centavos
Calendar year
Trade organizations
WTO, CAFTA-DR
Country group
Statistics
GDP
  • Increase $127.356 billion (nominal, 2024)[3]
  • Increase $293.365 billion (PPP, 2024)[3]
GDP rank
GDP growth
  • –6.7% (2020) 12.3% (2021e)
  • 5.5% (2022f) 5.0% (2023f)[4]
GDP per capita
  • Increase $11,774 (nominal, 2024)[3]
  • Increase $27,120 (PPP, 2024)[3]
GDP per capita rank
GDP by sector
agriculture: 5.5%; industry: 33.8%; services: 60.8% (2017 est.)
3.564% (2018)[3]
Population below poverty line
30.5% (2016 est)[5][6]
23.9% (2021 est)[7]
Increase 38.5 medium (2021)[8]
Labor force
5.278 million (2022 est.)
Labor force by occupation
agriculture: 14.6%; industry: 22.3%; services: 63.1% (2005)
Unemployment7.1% (2022 est.)
Main industries
ferronickel and gold mining, textiles, cement, tobacco, and sugar production, tourism
External
Exports$11 billion (2019 est.)
Export goods
ferronickel, sugar, gold, silver, coffee, cocoa, tobacco, meats, consumer goods
Main export partners
 United States 50.8%
 Haiti 11.8%
  Switzerland 10%
 India 7.5%
 Canada 6.2%
(2017 est.)[10]
Imports$20 billion (2019 est.)
Import goods
foodstuffs, petroleum, cotton and fabrics, chemicals and pharmaceuticals
Main import partners
 United States 44.7%
 China 14.2%
 Mexico 8.3%
 Brazil 6.5%
 Chile 4.7% (2017 est.)[11]
FDI stock
$42 billion (31 December 2019 est.)
$29.69 billion (31 December 2017 est.)
Public finances
37.7% of GDP (2017 est.)
Revenues$14.10 billion (2021 est.)
Expenses$16.60 billion (2021 est.)
BB− (Domestic)
BB− (Foreign)
BB (T&C Assessment)
(Standard & Poor's)[12]
$14.5 billion (March 2022 est.)
All values, unless otherwise stated, are in US dollars.

The economy of the Dominican Republic is the seventh largest in Latin America, and is the largest in the Caribbean and Central American region. The Dominican Republic is an upper-middle income[13] developing country with important sectors including mining, tourism, manufacturing (medical devices, electrical equipment, pharmaceuticals, and chemicals), energy, real estate, infrastructure, telecommunications and agriculture.[14][15] The Dominican Republic is on track to achieve its goal of becoming a high-income country by 2030, and is expected to grow 79% in this decade.[16] The country is the site of the single largest gold mine in Latin America, the Pueblo Viejo mine.[17][18] Although the service sector is currently the leading employer of Dominicans (due principally to growth in tourism and free-trade zones), agriculture remains an important sector in terms of the domestic market and is in second place (behind mining) in terms of export earnings. Tourism accounts for more than $7.4 billion in annual earnings in 2019.[19] Free-trade zone earnings and tourism are the fastest-growing export sectors. A leading growth engine in the Free-trade zone sector is the production of medical equipment for export having a value-added per employee of US$20,000,[20] total revenue of US$1.5 billion, and a growth rate of 7.7% in 2019. The medical instrument export sector represents one of the highest-value added sectors of the country's economy, a true growth engine for the country's emerging market.[21] Remittances are an important sector of the economy, contributing US$8.2 billion in 2020.[22] Most of these funds are used to cover household expenses, such as housing, food, clothing, health care and education. Secondarily, remittances have financed businesses and productive activities.[23] Thirdly, this combined effect has induced investment by the private sector and helps fund the public sector through its value-added tax. The combined import market including the free-trade-zones amounts to a market of $20 billion a year in 2019. The combined export sector had revenues totaling $11 billion in 2019.[19] The consumer market is equivalent to $61 billion in 2019.[24] An important indicator is the average commercial loan interest rate, which directs short-term investment and stimulates long-term investment in the economy. It is currently 8.30%, as of June 2021.[25]

The Dominican Republic's most important trading partner is the United States (over 40% of total commercial exchange; over $12 billion in trade). Other major trade partners are China (over $3 billion in trade), Switzerland (over $1 billion), Puerto Rico (over $800 million), Mexico (over $700 million), Haiti (over $700 million), Spain (over $700 million), the Netherlands (over $700 million), Canada (over $600 million), Brazil (over $500 million), and Germany (over $500 million), in that quantitative order.[26] The country exports free-trade-zone manufactured products (medical devices, electrical equipment, pharmaceuticals, and chemicals), gold, nickel, agricultural products, liquor, cocoa beans, silver, and sauces and seasonings. It imports petroleum, industrial raw materials, capital goods, and foodstuffs. On 5 September 2005, the Congress of the Dominican Republic ratified a free trade agreement with the U.S. and five Central American countries, the Dominican Republic – Central America Free Trade Agreement (CAFTA-DR). CAFTA-DR entered into force for the Dominican Republic on 1 March 2007. The total stock of U.S. foreign direct investment (FDI) in Dominican Republic as of 2019 was U.S. $42 billion, much of it directed to the energy, tourism, real estate, manufacturing, infrastructure and the telecommunications sectors.[14] In 2019 the foreign direct investment stock amounted to $42 billion a significant growth in the last decade and a half.[14] In 2020, during the COVID-19 pandemic, foreign direct investment flows in the Dominican Republic had remained strong at $2.5 billion added to the stock in that year. Having grown to an estimated $44.5 billion, and growing more than ten-fold since 2006 when the liberalization efforts began.[22]

An important aspect of the Dominican economy is the Free Trade Zone industry (FTZ), which made up U.S. $6.2 billion in Dominican exports for 2019.[19] Reports show, however, that the FTZs lost approximately 60,000 between 2005 and 2007 and suffered a 4% decrease in total exports in 2006. The textiles sector experienced an approximate 17% drop in exports in 2006 due in part to the appreciation of the Dominican peso against the dollar, Asian competition following expiration of the quotas of the Multi-Fiber Arrangement, and a government-mandated increase in salaries, which should have occurred in 2005 but was postponed to January 2006. Lost Dominican business was captured by firms in Central America and Asia. The tobacco, jewelry, medical, and pharmaceutical sectors in the FTZs all reported increases for 2006, which offset textile and garment losses. Industry experts from the FTZs expected that entry into force of the CAFTA-DR agreement would promote substantial growth in the FTZ sector in 2007. By the end of the last decade-and-a-half the free-trade-zone sector has rebounded and surpassed the former amounts of $4.5 billion in 2006 to grow to $6.2 billion by 2019.

  1. ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
  2. ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
  3. ^ a b c d e "Report for Selected Countries and Subjects: April 2024". imf.org. International Monetary Fund.
  4. ^ "Global Economic Prospects, october 2021". openknowledge.worldbank.org. World Bank. Retrieved 16 June 2020.
  5. ^ "Poverty headcount ratio at national poverty lines (% of population)". Archived from the original on 13 June 2007. Retrieved 11 June 2015.
  6. ^ "Poverty headcount ratio at national poverty line (% of population)". The World Bank. Retrieved 18 September 2014.
  7. ^ "La pobreza subió hasta el 23.85 % en 2021 en República Dominicana" (in Spanish). Retrieved 30 April 2022.
  8. ^ "GINI index (World Bank estimate) – Dominican Republic". data.worldbank.org. World Bank. Retrieved 30 March 2020.
  9. ^ a b "Human Development Report 2023/2024" (PDF). United Nations Development Programme. 13 March 2024. Archived (PDF) from the original on 13 March 2024. Retrieved 18 May 2024.
  10. ^ "Export Partners of Dominican Republic". CIA World Factbook. 2017. Archived from the original on 13 June 2007. Retrieved 26 July 2018.
  11. ^ "Import Partners of Dominican Republic". CIA World Factbook. 2017. Archived from the original on 13 June 2007. Retrieved 26 July 2018.
  12. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  13. ^ "Country and Lending Groups". Archived from the original on 24 May 2008. Retrieved 11 June 2015.
  14. ^ a b c "Foreign investment in the Dominican Republic - Santandertrade.com". santandertrade.com. Retrieved 17 March 2021.
  15. ^ "Dominican Republic (DOM) Exports, Imports, and Trade Partners". oec.world. Retrieved 2 July 2021.
  16. ^ "Overview". World Bank. Retrieved 17 March 2021.
  17. ^ "The World's 10 Largest Gold Mines by Production". 31 July 2019.
  18. ^ "World Top 20 Gold: Countries, Companies and Mines".
  19. ^ a b c "Sector externo". www.bancentral.gov.do. Retrieved 17 March 2021.
  20. ^ Mejia, Felivia (12 June 2020). "RD, la isla de los dispositivos médicos". Forbes Centroamérica • Información de negocios y estilo de vida para los líderes de Centroamérica y RD (in Mexican Spanish). Retrieved 29 April 2021.
  21. ^ "Dispositivos médicos encabezan exportaciones de las zonas francas dominicanas". Periódico elDinero (in Spanish). 11 January 2019. Retrieved 29 April 2021.
  22. ^ a b "Banco Central informa que las remesas recibidas al cierre de 2020 superan por primera vez los US$8,200 millones". www.bancentral.gov.do. Retrieved 17 March 2021.
  23. ^ Meyers, Deborah Waller. Migrant Remittances to Latin America; Reviewing the Literature, Washington DC; Inter-American Dialogue 1998
  24. ^ "Dominican Republic - The World Factbook". www.cia.gov. Retrieved 19 March 2021.
  25. ^ "Sector monetario y financiero". www.bancentral.gov.do. Retrieved 30 June 2021.
  26. ^ "OEC: Dominican Republic (DOM) Profile of Exports, Imports and Trade Partners". Observatory of Economic Complexity. Archived from the original on 17 September 2017. Retrieved 17 September 2017.