Although he acknowledges that the country needs tax reform, Raúl Ovalle believes that 2026 is not the right year to implement one.
SANTO DOMINGO. – Public investment is once again taking center stage in the government's economic discourse, and for economist Raúl Ovalle, this shift is significant, especially for the construction sector.
During the interview he gave to La Ventana de El Inmobiliario , he explained that after several years in which the idea that infrastructure should be driven mainly by the private sector prevailed, the budget and recent announcements point to a change of approach.
Ovalle observed that, at least in terms of signals, there is a greater understanding of the State's role in providing public goods. "If we analyze the history of global infrastructure, more than 90% of public goods infrastructure projects have been carried out by the government," he states.
Despite the change in narrative and execution, in this second term, Ovalle observes that public investment levels remain low in historical terms.
In an economy like the Dominican Republic's, the specialist explains, public investment should be around 3% of GDP, which would be equivalent to more than US$3 billion annually. In practice, spending has hovered around 2% of GDP and, in many cases, has fallen short of budgeted amounts. Even with the adjustments made by the Ministry of Finance, the amount remains insufficient.
The outlook for 2026 is moderately optimistic, and Ovalle anticipates better execution and a greater presence of the "public sector machinery," which could become a key driver for the recovery of construction and, by extension, the real estate market.
The backdrop to this discussion is the persistent fiscal deficit, as the Dominican Republic has been struggling with fiscal imbalances for almost 25 years, in a context where debt service is increasingly consuming income and subsidies, particularly for electricity, have multiplied.
“Fiscal space is shrinking, and that leads to the need for adjustment,” he warns.
However, the economist emphasizes that timing is as important as the design. While acknowledging that the country needs tax reform, he believes that 2026 is not the right year to implement it. He uses a medical metaphor to illustrate this: “Having high cholesterol doesn’t mean you’ll have a heart attack tomorrow, but if you do nothing, over time your arteries can become clogged.”
In his view, the country does not face an immediate solvency problem, but rather sees the risk in the medium term, associated with rigid spending and low investment in infrastructure.
Before a tax reform, the economist suggests sending clear signals of efficiency, reorganizing spending, and redirecting savings toward public investment, as a way to build the political legitimacy necessary for a deeper adjustment that, from his point of view, should be discussed around 2028.
For the real estate sector, the message from Ovalle's analysis is clear: recovery will depend more on a combination of macroeconomic stability, increased public investment, and well-timed fiscal decisions, and less on isolated measures.
