Improving Reform Outlook For Dominican Government, Though Haitian Instability May Present Risks

• An improving COVID-19 situation in the Dominican Republic and economic tailwinds will bolster public support for President Luis Abinader and help facilitate his market-friendly policy agenda. 
• The DomRep government quickly secured enough COVID-19 vaccine doses to vaccinate its entire population, and the national campaign has vaccinated 49.5% of citizens as of July 19, making it the fastest vaccination effort in the Caribbean. The successful vaccination efforts have also allowed the country to facilitate visitors to the island without the requirement for a negative COVID-19 test, which has bolstered demand for its tourism product and allowed for a strong recovery in the sector so far this year. 
• Economic activity has also strengthened in 2021, averaging 13.4% monthly growth in the year through May. Real GDP growth is forecasted to be 6.0% in 2021 and 4.7% in 2022, which will help reverse the economic impact of the pandemic that caused real GDP to contract 6.7% in 2020. 
• However, political instability in neighbouring Haiti is likely to spur immigration to the Dominican Republic and may prompt the government to tighten entry requirements. 
• Fitch Solutions maintains the Dominican Republic’s score of 66.3 out of 100 in its Short-Term Political Risk Index (STPRI) as an improving economy and the recent developments in Haiti will offset in the country’s broader risk profile.  

(Source: Fitch Solutions & NCBCM Research)