President Abinader Will Maintain Investor-Friendly Policies In DomRep, But Constitutional Reform Will Stall

• President Luis Abinader’s push for investor-friendly policies designed to bolster investment and some changes designed to promote government transparency in the coming quarters, are supported by a swift economic recovery from the COVID-19 pandemic in the Dominican Republic and broad public approval. 
• While the president’s strong position in the legislature and high public approval will help him to advance other reform measures, his push for constitutional reforms aimed at combatting corruption will likely remain on hold in the coming months, as opposition parties have been opposed to the measures proposed. 
• Notably, owing to these risks the sovereign scored 66.6 out of 100 in Fitch’s Short-Term Political Risk Index (STRPI). The country’s score is below the average score of 69.4 among the 16 Caribbean markets in the STPRI but sits above the emerging market average of 59.2. 
• In addition to these risks, elevated inflation will pose persistent risks to social stability and Abinader’s popularity in the months ahead. In the year through February, inflation averaged 8.9% y-o-y, up from 6.7% during the same period in 2021, and higher prices for crude oil and other commodities following Russia’s invasion of Ukraine will keep price growth elevated in 2022. Therefore, as citizens begin to feel the pinch of rising costs for basic goods, they may launch protests against higher prices or Abinader's agenda.

(Source: Fitch Solutions)