The Dominican Republic economy is set to recover to pre-pandemic levels by the end of 2021, with gross domestic product (GDP) predicted to hit an historic high.
The news will come as the latest demonstration of the Caribbean nation’s economic reactivation, and will be welcomed by investors looking to register a company in the Dominican Republic, or already operating there.
According to new figures released by the Dominican Republic’s Central Bank (BCRD), the country’s GDP will hit $91.6 billion by the end of 2021 — having sunk to $78.8 billion in 2020, when the global crisis was at its worst (all figures in USD).
Previously, GDP in the Dominican Republic had hit its highest in 2019, when it reached $88.9 billion, according to World Bank data.
The new predicted figure would represent an annual GDP growth of 16% — far outstripping the 8% GDP growth predicted for the country by the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) in early September.
According to the BCRD, the positive outlook for the Dominican Republic economy is driven by strong results in the tourism sector, which generated 26.8% more revenues in the first half of the year, compared to the same period in 2020.
That was driven by a major uptick in visitor numbers, with the 2.9 million visitors seen up to August representing a 79.2% increase on the previous year. By the end of the year, that number is expected to reach 4.5 million.
The BCRD also highlighted how monetary policies introduced at the onset of the crisis in March 2020, and which injected funds equivalent to 5% of GDP into the economy, were also key to the country’s fast recovery.
Dominican growth highlights investment opportunities
The predicted growth of the Dominican Republic economy will be welcomed by foreign investors operating in the market or interested in launching there.
The Dominican Republic economy is the largest in the Caribbean by GDP, and eighth-largest in Latin America.
Since adopting a number of measures in the 1990s intended to open up the economy, the country has grown significantly, with GDP only declining once year-on-year in the two decades before the pandemic struck.
The growth of the economy has also been met with a significant rise in prosperity, with gross national income (GNI) more than tripling between 2004 and 2019, to reach $8,100 per capita — placing the Dominican Republic as an upper middle income nation by international standards.
While GNI declined during the pandemic, it is now set to bounce back again, with the Dominican Republic economy set to be one of the fast growing in Latin America and the Caribbean this year.
The Dominican Republic has long been a popular destination for international capital, with foreign direct investment (FDI) hitting a peak of $3.6 billion in 2017. The country boasts a number of strong business opportunities, and the latest economic predictions are sure to inspire even greater investor confidence.
Among a number of significant draws, the country boasts an extensive network of free trade zones, which provide enticing tax incentives and are home close to 700 companies country-wide.
Key exports from the country include agricultural goods such as tobacco, fruits, and nuts, as well as manufactured goods such as clothes, medical equipment, and electrical machinery. Beyond that, gold is also a major export product, with the value of exports leaping 80% earlier this year.
Biz Latin Hub can help you doing business in the Dominican Republic
At Biz Latin Hub, our local team of multilingual corporate support experts is available to assist you entering and doing business in the Dominican Republic economy.
We offer a comprehensive portfolio of back office services, including company formation, accounting & taxation, legal services, visa processing, and hiring & PEO, meaning that we can offer a tailored package of integrated back-office services to suit every need.
We also have teams in place in 15 other markets around Latin America and the Caribbean, and specialize in multi-jurisdiction market entry.
Contact us today to find out more about how we can help you reach your commercial goals.
Or read about our team and expert authors.