Dominican Republic to Benefit From, And Then Slow With, The US Economy In 2024

• After posting weak 1.0% y-o-y growth in Q223, Fitch Solutions expects the Dominican economy to pick up in H223 due to a well-performing US economy, ultimately growing by 2.5% this year. This marks an upward revision from its previous forecast of 2.3%.
• Fitch forecasts that 2023 US real GDP growth will be 2.1% and that it will continue to perform well through mid-2024, which will fuel demand for Dominican goods and services exports.
• Notably, Dom Reps tourism sector – approximately 15% of headline GDP – is heavily fueled by US nationals, who make up over one-third of total tourist arrivals. 
• Additionally, US consumer demand will also drive the Dominican manufacturing sector; in 2022, around 55% of Dominican exports were destined for the United States, predominately medical and electrical equipment and machinery. This is likely to bring down unemployment from its current level of 5.6% and increase consumer spending
• Fitch expects that the Dominican economy will report faster growth in 2024 at 2.7%, though the agency believes it will slow in H224 as the US enters a mild recession.
• Risks to Fitch’s forecast are tilted towards the upside, as the US recession may be more moderate than expected, which would lead to continued US consumer spending that would benefit the Dominican economy.

(Source: Fitch Solutions)