"The Dominican economy is expected to expand between 4.5% and 5.0% by the end of 2025, remaining one of the fastest growing in Latin America.".
SANTO DOMINGO – Emilio Fernández-Corugedo, representative of the International Monetary Fund (IMF), stated yesterday that “the Dominican Republic’s economic performance is largely due to the social peace, macroeconomic stability, and legal security that characterize the country, not forgetting the monetary and fiscal policy measures taken, coupled with the good governance of President Luis Abinader.”
This was stated during the first meeting with the IMF staff visit and the governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu. The IMF delegation will be conducting a series of consultative visits to economic institutions in the country for a week to gather information for the upcoming Article IV consultation mission.
Fernández-Corugedo also spoke highly of Valdez Albizu's recent article published in the media about the opportunities and challenges facing the Dominican Republic in the international context, noting that the international institution considered it "clear and relevant," and emphasizing that the IMF's criteria "are very much in line with what the governor expressed in the communication.".
During the meeting held at the BCRD headquarters, Valdez Albizu gave a presentation in which he pointed out that “economic activity maintained a good performance during 2024, with a growth of 5.0%, close to its potential and one of the highest in Latin America, with an inflation of 3.35%, one of the lowest in the region, excluding dollarized economies, with core inflation of 4.01%.”.
He also stated that “going forward, as high global uncertainty moderates and the monetary policy transmission mechanism continues to operate, the Dominican economy is expected to expand between 4.5% and 5.0% by the end of 2025; remaining one of the fastest growing in Latin America.”.
Furthermore, he addressed the employment situation, highlighting that “there was an improvement, with the unemployment rate reaching 4.8% in the last quarter of 2024, lower than the 5.0% recorded in 2023.” He added that “employment reached a record high of over 5 million workers, following an increase of approximately 98,000 employed individuals during 2024. He emphasized that the number of formally employed individuals increased by more than 140,000 during this period, while informal employment decreased by approximately 42,000. As a result, the informality rate fell to 54.8% during the last quarter of 2024, its lowest level ever recorded, excluding the atypical period of the COVID-19 pandemic.”
The governor also informed them that inflation “remained within the target range of 4% ± 1% for the last 15 months, reaching 3.56% year-on-year in February 2025; while core inflation reached 4.21%, close to the midpoint of the target. The Central Bank's forecasting models indicate that both headline and core inflation will remain within the target range of 4% ± 1% during the current year and throughout the monetary policy horizon.”.
Another noteworthy aspect of his presentation was that “in a context of low inflationary pressures, the Central Bank of the Dominican Republic (BCRD) reduced its monetary policy rate (MPR) by 125 basis points during the second half of 2024, setting it at 5.75% annually. Additionally, the BCRD implemented measures to increase liquidity in the financial system, including extending repo facilities to a term of up to 28 days, redeeming Central Bank securities for approximately RD$140 billion during the last quarter of 2024, and releasing RD$35.355 billion from the legal reserve requirement for housing construction and acquisition.”.
The IMF mission highlighted the country's climate of stability. (EXTERNAL SOURCE).
Valdez Albizu emphasized that “the Dominican financial system remains robust, well-capitalized, and highly profitable. The financial system's solvency ratio closed 2024 at 17.4%, exceeding the regulatory minimum of 10%. Return on equity (ROE) stood at 23.2%, while return on assets (ROA) reached 2.8% in January 2025; meanwhile, the financial system's delinquency rate was only 1.5%.”.
The governor highlighted that “as of the end of February 2025, international reserves exceeded US$14.9 billion, equivalent to 11.6% of GDP and 5.4 months of imports. Furthermore, these reserve levels represent approximately 90% of the new reserve adequacy metric suggested by the IMF, a value considered comfortable.”.
Regarding the foreign exchange market, he stated that during the first two months of 2025, an accumulated depreciation of 1.9% has been observed, driven by the seasonal demand for foreign currency from companies importing merchandise to replenish inventories and pay suppliers, as well as by the precautionary demand of economic agents in the face of greater uncertainty in global markets.
He noted that “despite the uncertain international environment, it is projected that by the end of 2025 the current account deficit will be reduced to 3.0% of GDP; which would once again be financed entirely by foreign direct investment estimated at US$4.7 billion.”.
He concluded by highlighting that, in total, “the Dominican economy generated foreign exchange of about US$43.8 billion during 2024 and it is projected that about US$45.7 billion will be generated during 2025.”.
Héctor Valdez Albizu detailed the country's economic performance. (EXTERNAL SOURCE).
For his part, Fernández-Corugedo specified “the consultative nature of the visit, in accordance with the usual procedures for IMF 'Staff Visits', with a view to planning the meeting regarding Article IV”
The IMF mission also included, in addition to Fernández-Corugedo, Manuel Rosales, senior economist; Pamela Madrid, senior economist; and Gerardo Peraza, resident representative in Central America, Panama and the Dominican Republic.
The governor was accompanied by the manager, Ervin Novas Bello; the deputy general manager, Frank Montaño; the deputy manager of Monetary, Exchange and Financial Policies, Joel Tejeda Comprés; the economic advisor to the Governor, Julio Andújar Scheker; the representative of the Dominican Republic to the IMF, Frank Fuentes; the deputy managers Ramón González, Joel González, Máximo Rodríguez and Brenda Villanueva; the directors Carlos Delgado, Elina Rosario and José Perdomo; and the consultant Liselotte Reyes.
