Improving External Demand Outlook Will Drive Stronger 2024 Growth In the Dominican Republic

• From an estimated 2.5% in 2023, Fitch Solutions forecasts real GDP growth in the Dominican Republic will accelerate to 3.4% in 2024 on the back of continued policy loosening and tailwinds from resilient US demand in the first half of 2024.
• The 2024 forecast is a significant upward revision from the 2.7% previously forecasted but still below consensus expectations of 4.4%.
• This largely reflects the view that a US economic slowdown in the latter half of 2024 will weigh on Dominican headline growth, primarily through weaker exports and private consumption.
• That said, more resilient US demand in H1 2024, will sustain the tourism sector boom seen in the post-pandemic recovery for the Dominican Republic for several more months before slowing in the back end of the year.
• Overall, robust tourism and broader hospitality sectors will help sustain low levels of unemployment at an average of 6.2% in 2024. In addition, a tight US labour market will continue to drive inbound remittance growth, which reached 8.1% of GDP in 2023, from an average of 7.4% between 2015 and 2019.
• Risks to the Dominican Republic’s 2024 growth forecast are mostly dependent on the performance of the US economy and the actions of the US Federal Reserve, although factors affecting international energy prices will also play a role.

 (Source: Fitch Solutions)