The underlying message is aimed at investors, particularly in the real estate sector
SANTO DOMINGO – Moody's Ratings' most recent assessment, valid until March 2026, confirms that the Dominican Republic's economy maintains solid macroeconomic fundamentals. However, it warns that any improvement in the sovereign rating will depend almost exclusively on structural progress on the fiscal front.
The country maintains its Ba2 rating with a stable outlook, in a context of sustained growth, tourism resilience, and steady remittance flows.
Moody's Ratings is one of the world's leading credit rating agencies, responsible for assessing the ability of governments and companies to meet their financial obligations. Its ratings directly influence the cost of financing and investors' perception of risk internationally.
The indicators of the Central Bank of the Dominican Republic support this diagnosis, providing evidence of an expanding economy above the regional average, supported by robust domestic demand and the stability of the external sector.
The most recent data confirms that the Dominican economy began 2026 with a reacceleration of economic activity.
The Monthly Indicator of Economic Activity (IMAE) registered a year-on-year growth of 3.5% in January, the highest rate in ten months, driven mainly by construction (7.6%), local manufacturing (3.4%) and services linked to tourism.
This performance follows a more moderate 2025 (2.1%) and reflects greater dynamism in investment and consumption, in a context of gradual recovery of domestic demand.
On the other hand, the fundamentals of demand and the external sector remain solid. This is evidenced by the performance of remittances, one of the main drivers of consumption, which reached US$11.866 billion in 2025 and are projected to continue growing through 2026.
Foreign direct investment also increased by 11.3%, with a significant contribution from the real estate sector. This, coupled with an official growth projection of between 4% and 5% for 2026, positions the country above the regional average and confirms an expansionary environment supported by domestic demand and stable external inflows.
According to Moody's assessment, the economy is growing, but public finances are not improving at the same pace. These are positive indicators, but they are insufficient to propel the country to a new level in its credit rating.
Impact on the real estate sector
For the real estate sector, which is highly sensitive to financial conditions and the perception of country risk, this assessment has direct implications. On the one hand, a stable rating supports access to external financing and maintains the confidence of international investors. On the other hand, it limits a significant reduction in the cost of capital, keeps risk premiums relatively high, and reduces the likelihood of accelerated expansion driven by an improvement in the sovereign rating.
In practical terms, this means that the sector's growth will continue to depend more on internal factors such as demand, tourism, and foreign direct investment than on cheaper sovereign financing.
The Dominican economy continues to stand out in the region for its dynamism. However, Moody's current assessment introduces a key warning: economic growth alone is no longer sufficient to improve the country's credit rating.
Until structural reforms in the fiscal sphere materialize, the country will continue to offer an attractive environment for investment, but with clear limits in its sovereign risk profile, a factor that the real estate market will have to continue incorporating into its projections.
Without tax reform, there will be no improvement in the rating
Moody's identifies tax pressure as the main limiting factor in the State's ability to reduce its dependence on debt, improve the quality of public spending, and absorb external shocks without deteriorating its credit profile.
The most recent data indicates that the country's tax burden, estimated at around 16% of GDP, remains low compared to similar economies, which is the main obstacle to an improved rating.
Added to this is the high burden of debt service in relation to tax revenues, which the agency defines as "weak debt affordability," reinforcing the need to strengthen the country's tax base.
The assessment sends a clear signal to the market: there is no immediate pressure for a downgrade, but neither are there conditions for an improvement in the short term. In technical terms, the country remains in a stable scenario with no catalysts for improvement.
Moody's explicitly conditions any positive change in the rating on the implementation of a comprehensive tax reform and a sustained increase in public revenue.
In the absence of these factors, the Dominican Republic would continue in the Ba2 range, within the speculative grade.
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