SANTO DOMINGO – The International Monetary Fund has concluded its Article IV consultation for the Dominican Republic, delivering a broadly positive assessment of the nation’s economic trajectory through 2025. While acknowledging a recent growth deceleration attributed to global financial tightening and worldwide uncertainty, the Fund projects a robust recovery with growth accelerating to 4.5% in 2026, nearing the country’s long-term potential of approximately 5%.
The IMF’s preliminary findings highlight the Dominican Republic’s strong economic fundamentals, which include manageable risks and significant policy flexibility to counteract adverse scenarios. This resilience has been bolstered by expansive fiscal and monetary policies that have stimulated a gradual rebound in key sectors. Notably, credit activity, export volumes, and the vital tourism industry have all demonstrated strengthened performance. Inflation remains well-contained, with an estimated average of 3.7% for the year 2025.
External sector stability is another cornerstone of the assessment. The current account deficit is projected to hold steady at around 2.5% of GDP, a level deemed sustainable as it is fully financed by robust foreign direct investment flows, signaling enduring investor confidence.
Despite a risk profile where external challenges—including volatile financial conditions and vulnerability to climate events—currently outweigh domestic positives, the IMF asserts the country is well-equipped to handle potential shocks. This capacity stems from substantial international reserves, a stable banking sector, and the existence of fiscal space for countercyclical measures.
The consultation placed significant emphasis on the critical need for structural reforms. Key recommendations include advancing a comprehensive tax reform designed to boost government revenues by rationalizing generalized subsidies, all while safeguarding essential social spending. The adoption of a medium-term revenue strategy was advised as a framework for broader fiscal modernization.
Furthermore, the IMF stressed the urgency of fully implementing the national Electricity Pact to reduce substantial sector losses and alleviate fiscal pressures. The Fund also advocated for enhanced governance, labor market flexibility, and social security reforms aligned with the country’s Meta 2036 development plan. Increased public investment in infrastructure, education, and healthcare was identified as vital for fostering more inclusive and competitive growth.
On monetary policy, the Central Bank’s approach was deemed appropriate. The IMF recommended maintaining exchange rate flexibility, limiting foreign exchange interventions to episodes of severe market disruption, and strengthening the monetary transmission mechanism while gradually phasing out extraordinary liquidity support introduced during past crises.
The financial system was recognized as sound with low systemic risk. The IMF encouraged authorities to continue bolstering regulatory and supervisory frameworks, fully implement Basel II and III capital standards, and further enhance policies to combat money laundering and terrorist financing.
