Fitch Solutions Revises Dom Rep’s 2024 Growth Upwards

• Fitch Solutions forecast that the Dominican Republic will experience accelerating real GDP growth from 2.4% (est. 2.5%) in 2023 to 3.8% (prev. forecast 3.4%) in 2024 as tailwinds from resilient US demand will support export and private consumption growth. Strength in export-facing sectors will support the labour market, boosting household incomes and consumption.
• Further, Fitch is revising its 2023 current account deficit forecast upwards from 4.2% of GDP to 1.3% for the Dominican Republic. In 2024, the deficit will widen slightly to 1.4%. A larger goods trade surplus, a stronger performance for the tourism sector and resilience in remittance inflows are behind Fitch’s more optimistic view for 2023.
• After revising the Dominican Republic’s 2023 budget deficit forecast from an estimated 3.4% of GDP to 2.4%, the company forecasts the deficit will marginally widen to 2.8% in 2024. Risks are skewed toward a wider deficit, considering the Dominican Republic may experience natural disasters and fluctuating energy prices that could raise government expenditure and lower consumption growth.
• Additionally, Fitch believes that the incumbent president of the Dominican Republic, Luis Abinader will win a second term comfortably, while his Partido Revolucionario Moderno (PRM; English Translation: Modern Revolutionary Party) and their allies are likely to increase their share of seats in congress. With a strong mandate, Fitch expects broad policy continuity with a relatively pro-business and pro-market economic policy.

(Source: Fitch Solutions)