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COUNTRY INSIGHTS

​DR Government places foreign bonds and carries out liability management operation
DOMINICAN REPUBLIC · In Brief · 19 Feb 2022

The Ministry of Finance reported that sovereign bonds were placed in the international capital market for USD3.56 b. About USD2.3 b will finance the 2022 Public Budget, covering 63.6% of the total external financing to be contracted in accordance with Law 345-01. The remaining USD1.26 b are desti...

Inflation now the main concern
DOMINICAN REPUBLIC · Report · 11 Feb 2022

Inflation ended 2021 at 8.5%, its second highest level since the banking crisis of 2003-2004, but below the 10.65% of 2008, when the price of WTI oil increased 37.7% to $99.56 a barrel. Episodes of high inflation in the DR are generally associated with sharp oil price increases, and 2021 was no e...

The monetary policy rate rises again
DOMINICAN REPUBLIC · In Brief · 01 Feb 2022

The Central Bank decided to increase the monetary policy rate for the third time since last November. The increase has been 50 basic points, passing the rate from 4.5% to 5.0% per year. The change implies that the rate of the permanent facility for liquidity expansion (1-day Repos) increases from...

​Central Government deficit ends at 2.7% of GDP in 2021
DOMINICAN REPUBLIC · In Brief · 20 Jan 2022

The Ministry of Finance reported that the Central Government deficit was 2.7% of GDP in 2021, lower than the 3.0% originally contemplated in the 2021 Public Budget approved in 2020. This reduction is due to an significant increase in tax revenues, 12.7 % higher than initially planned. Although sp...

2021 exceeded expectations, but structural reforms loom
DOMINICAN REPUBLIC · Report · 10 Jan 2022

Performance in 2021 exceeded expectations in terms of economic growth, the exchange rate and accumulation of international reserves. The same was not true, though, for inflation, which failed to stay within the target range, while the NFPS deficit ended at around 3% of GDP, similar to the level c...

New increase in the monetary policy rate in a context of inflationary pressure and strong economic recovery
DOMINICAN REPUBLIC · In Brief · 30 Dec 2021

The Central Bank of the Dominican Republic announced an increase in the monetary policy rate of 100 basis points, placing said rate at 4.5% per year. It is the second time that the monetary policy rate has increased after the reductions experienced during 2020 in order to support the economic rec...

Economic expectations exceeded
DOMINICAN REPUBLIC · Report · 13 Dec 2021

The capacity for rapid recovery of the Dominican economy was reaffirmed in the final stretch of 2021, with y/y growth of 12.4% in January-October 2021. Higher economic growth, greater-than-expected tax revenues and containment of spending have led to a drastic reduction in the nonfinancial public...

The Central Bank of the Dominican Republic raised the monetary policy interest rate
DOMINICAN REPUBLIC · In Brief · 24 Nov 2021

Given the persistence of inflationary pressures beyond what was expected, the Central Bank today decided to raise the monetary policy rate from 3% to 3.5%, annually. With the decision, the interest rate of the permanent liquidity expansion facility (1-day Repos) also increases from 3.5% to 4.0%, ...

​Second budget amendment reestablishes a fiscal deficit of 3% of GDP in 2021
DOMINICAN REPUBLIC · In Brief · 18 Nov 2021

The government sent to Congress a second amendment to the Public Budget for 2021. The amendment reflects a substantial improvement in the government's projected revenues for 2021, 8.3% higher than the amount projected in the first budget amendment for 2021. There is also a 1.4% increase in expend...

Private investment is driving double-digit growth
DOMINICAN REPUBLIC · Report · 09 Nov 2021

After several weeks of indecision over whether to propose a tax reform, President Luis Abinader finally chose not to move forward, and indefinitely suspended discussions over the fiscal pact. This measure was widely accepted by both business and the public, with all sectors understanding that thi...

​President Abinader will not present tax reform.
DOMINICAN REPUBLIC · In Brief · 27 Oct 2021 · 1 response

In the long-awaited address to the country, President Luis Abinader announced that he will not submit a tax reform to Congress or increase taxes. He indicated that the only priority at this time is to consolidate the economic recovery and continue betting on growth and investment. The Government ...

A powerful rebound - and prospects for tax reform
DOMINICAN REPUBLIC · Report · 12 Oct 2021 · 1 response

The probability that the Dominican economy will end 2021 with growth of close to 10% is increasing, given accumulated growth of 13% in January-August, compared to the same period in 2020. But not everything is rosy. Although formal employment has returned to nearly pre-pandemic levels, overall un...

Government's tax reform proposal leaked to the press aims to raise revenues by 2.35% GDP in 2022 and 1.79% in 2025
DOMINICAN REPUBLIC · In Brief · 11 Oct 2021 · 2 responses

A document from the Dominican government has been leaked to the press outlining the purposes of the tax reform that is expected to be formally disclosed in the next few days, and that so far has not been confirmed or denied by official bodies. In this document, the Dominican government lays down ...

A Public Budget Bill for 2022 without fiscal reform and a deficit of 3% of GDP
DOMINICAN REPUBLIC · In Brief · 28 Sep 2021

The Council of Minister approved yesterday that the General Public Sector Budget Bill for 2022 will have a deficit of 3% of GDP. The amount of income is projected in DOP871 b. and the total expenses and financial applications would amount to DOP1,046 b. The financing need would amount to DOP175 b...

​A timid and general sketch of the content of the tax reform proposal
DOMINICAN REPUBLIC · In Brief · 21 Sep 2021

The Dominican government delivered at the last meeting of the Economic and Social Council on September 15, the document Dialogue of Reforms 2021: Introductory Document for Discussion, in which it roughly outlines the content of the 12 proposed reforms for discussion with the representatives of po...

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