"It is a significant challenge for a construction sector that is heavily dependent on the cost of financing projects," said Juan Ariel Jiménez.
SANTO DOMINGO – Economist and former Minister of Economy, Planning and Development, Juan Ariel Jiménez, warned that interest rates in the Dominican Republic have maintained an upward trend since 2021 and that this dynamic will continue at least until 2026 .
This was stated during the virtual conference “Economy and financial stability: challenges and perspectives for the business sector of SDE”, held within the framework of the first Congress “Vision that Builds Strategic Leadership”, organized by the Association of Builders of Santo Domingo East (Acosde).
Jiménez highlighted that, in recent years, the construction has shown a decline , citing as an example the 7.7% contraction recorded in 2024, and stressed that the negative numbers persist in 2025.
“Statistics published by the Central Bank, from January to June, show that the construction sector has fallen by 2.3%, compared to 2024, which was also falling,” he stated.
According to the specialist, this situation is worrying because "the construction sector has very special economic strength that drives many other sectors of the Dominican economy."
Delving deeper into the causes, he pointed out that the behavior is mainly due to high interest rates , which remain elevated and show no signs of changing.
“We can see how since 2021 it has accelerated considerably, it has grown a lot. And in economics, things are not just about the level they are at, but how they are moving,” he explained.
In this context, the economist contrasted the years 2015 to 2017, when rates were also high , but were decreasing , which facilitated the execution of projects.
“They were high, but they were falling. It was easier to capture the development costs of new projects, whereas currently what is happening is that each year it is more difficult to develop new projects, from the point of view of interest rates,” he explained.
The Harvard Kennedy School professor also emphasized that the country must adapt to a financial scenario with higher interest rates than in the past, which represents a challenge for credit-dependent sectors such as construction.
He added that what was observed in the world, and in the Dominican Republic, in the years 2009-2010 will not be repeated.
“We will have to get used to living in an environment of high interest rates . Not extremely high, but higher than what we saw in the past. And this is a significant challenge for a construction sector that depends heavily on the cost of financing projects,” he said.
In summary, he stated that the international landscape is complex, though not yet in crisis. He described it as presenting “ scenarios of higher interest rates, greater volatility, and greater risk , intensifying the economic policy dilemma of controlling the currency or maintaining low interest rates.”
In that regard, Jiménez warned business owners in Santo Domingo East that they will face less dynamism and higher interest rates during this year and next.
During his participation, and by way of conclusion, he recommended that importers of materials, consumer products and construction products act with caution in the face of the volatility of the dollar : they should be very careful when making their purchases, as the currency can rise or fall in a matter of days.
