The Dominican Republic’s economy has demonstrated uncommon resilience amid a decade marked by successive shocks and a highly uncertain international environment.
The pandemic, geopolitical tensions in Europe and the Middle East, and less favorable global conditions have all tested the country’s capacity to respond. Even so, macroeconomic stability remains a central pillar. In an article published in Página Abierta, the Central Bank of the Dominican Republic (BCRD) highlights the main findings of the International Monetary Fund’s (IMF) Staff Report, which analyzes the country’s recent performance, its outlook, and the risks ahead.
The IMF begins its assessment by placing Dominican growth in historical context. Over the past two decades, the economy expanded by about 5.0% annually, driven by sound policies and strong fundamentals. According to the report, this combination allowed the Dominican Republic to achieve the fastest rate of income convergence with developed economies among Latin American countries. This dynamism has been accompanied by a stable price environment and low inflation volatility, supported by the inflation-targeting framework adopted by the BCRD in 2012. Additional support has come from steady inflows of foreign direct investment, which this year are expected to approach US$5 billion, boosted by the country’s social and political stability and its favorable business climate.
The IMF’s analysis also reviews the recent economic situation. In 2024, the economy grew 5.0%, with expansions in practically all sectors, while inflation remained within the target range of 4.0% ± 1.0% since May 2023.
The mission notes that although 2025 has shown a slowdown—driven by global uncertainty, tighter financial conditions, and softer tourism performance, reflected in 2.2% cumulative growth through August—the labor market has continued to show strength. The report highlights a stable unemployment rate, historically high labor participation, and declining informality, all of which reinforce the resilience of domestic activity.
A key element of the analysis is monetary policy. The IMF details that the easing cycle initiated in May 2023 reduced the Monetary Policy Rate (MPR) by 300 basis points through September 2025, followed by an additional 25-basis-point cut in October, bringing it to 5.25% annually.
The BCRD also implemented liquidity measures to accelerate monetary policy transmission. These steps resulted in a significant decline in interest rates: the interbank rate fell from 12.6% in June to 7.0% in November; the deposit rate dropped from 10.2% to 6.0% between November 2024 and November 2025; and the lending rate decreased from 16.1% to 13.7%.
According to the IMF, Dominican monetary policy has been appropriate, and the real interest rate remains near its neutral level. The report also highlights the strength of the financial system, which shows a capital adequacy ratio of 18.4% as of June, return on equity of 21.7% as of October, and non-performing loans of just 1.9%. Credit in local currency is growing at around 8.0% year-over-year. The IMF recommends continued reforms in fiscal policy, the electricity sector, financial inclusion, export diversification, and climate resilience.
The exchange rate and international reserves
Regarding the exchange rate, the IMF notes that the BCRD has not intervened in the market during 2025 and has revised regulations to improve risk management, increase transparency, and support better price formation. As a result, the IMF reclassified the country’s exchange rate regime as floating. International reserves stand at 114.4% of the ARA metric, equivalent to more than 11% of GDP, covering five months of imports.
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