The United States plays a major role in the Dominican economy. From this country comes most of the remittances received by Dominicans, more goods are imported and it is the main destination of national exports.
According to official data, the majority of tourists entering the Dominican Republic also leave from the United States.
“The cycle of the Dominican economy is very much subordinated, precisely, to the cycle of the North American economy; it is a common cycle,” explains economist Antonio Ciriaco. “Clearly, when the economy goes into recession there, a few months later the Dominican economy also has a slowdown process because in both cases they are common economic cycles.”
Trade behavior
In the case of exports and imports, according to the Foreign Trade Yearbook 2022, published by the National Statistics Office (ONE) during 2022, the Dominican Republic exchanged goods with the rest of the world for a value of US$43,436.6 million, of which 71.5% corresponded to imports and 28.5% to exports.
“The main export market for the Dominican Republic is obviously the United States. More than 50 percent of free zone exports go to that market. “Antonio CiriacoEconomist”
Ciriaco points out that, when total exports are calculated, about 30 percent of trade in goods and services goes to the United States.
“In addition, 85 percent of the remittances that come to the country are from the Dominican diaspora residing in U.S. territory,” he points out.
The Foreign Trade Yearbook 2022 details that the commercial exchange increased by 20% compared to 2021, which, in absolute terms, the increase was $7,224.4 million.
During 2022, the country exported 12,390.3 million dollars in merchandise to 144 nations. The exported value increased by 6 %, equivalent to 747.1 million dollars more compared to 2021.
79.1 % of the total value exported was concentrated in the five main partners:
United States
Haiti
Switzerland
The Netherlands
India
The remaining 20.9% was distributed among the other countries, with particular percentages of participants that did not exceed 2.8%.
Likewise, the Foreign Trade Yearbook 2022 indicates that the United States was the country’s main trading partner and the destination for 56 % of the total value of exported goods, for the amount of 6,936 million dollars. When compared to 2021, the exported value increased by 6.4 %, some 418.2 million dollars more.
Imports
On imports, the ONE document explains that in 2022 the country imported goods from 214 countries of origin, 21 more compared to 2021.
However, 79.2 % of the value of imported goods originated from 10 countries, the main ones being the United States with a share of 43.5 %, followed by China with 15.1 %, Mexico (3.8 %) and Brazil (3.7 %).
Leading the way in tourism
When reviewing tourism sector statistics, official data indicate that in the period January-April 2023 the country received 2,757,810 tourists, 25 % more than in the same period of 2022 and 17 % above 2019.
In addition, the 2,757,810 tourists that arrived in the first four months of this year exceed the 2,340,959 in 2022 and the 2,460,423 in 2019.
The Ministry of Tourism reported that in April 2023, 47.2% of the tourists visiting the Dominican Republic came from the United States, 19.5% from Canada and 3.7% from Colombia, among others.
As for foreign direct investment, the Dominican Republic registered more than 35,149 million dollars between 2010 and 2022, with 25.98% coming from the United States, followed by Canada with a participation of 15.18%.
Economist Ivan Rodriguez emphasizes to Diario Libre that the United States is the most important trade partner for the Dominican Republic. He explains that about 55% of the total exports of the Dominican Republic were directed towards that great market, while the Dominican imports from that territory represent an average for the last years of 44%.
“Historically in that commercial exchange the balance results in a ratio of 63 to 37 negative for the Dominican Republic, which means that for every 100 dollars that the country trades with the United States, it buys 63 dollars from it and only sells 37 dollars to it,” he points out.
He says that, using data from the U.S. Department of Commerce, in 2022 Dominican exports to that nation totaled 6.5 billion dollars, while imports were 10.6 billion dollars, for a negative local balance of 4.1 billion dollars.
On the tourism side, Rodriguez emphasized that the United States continues to be the origin of the large number of foreigners who visit the country annually, this being a fundamental factor in the contributions made by tourism to the Dominican gross domestic product.
Economist Jose Luis Ramon points out that the phrase “when the United States sneezes, the Dominican Republic gets the flu” illustrates quite well the economic relations between the countries.
“In 2022 alone, we exported around US$6.9 billion to the United States (half of all exports), and received more than US$13.5 billion in imports, being our main trading partner,” he points out.
He also explains that tourism generated more than 8 billion dollars, partially explained by the arrival of more than two million U.S. tourists, while remittances exceeded 9 billion dollars, the majority (4 dollars out of 5) coming from that country.
“These figures summarize the importance of the U.S. economy on the Dominican economy,” he emphasized.
Since 2010, the Dominican Republic has received more than $78,763 million as remittances, with the United States being the main sender of resources to Dominican families.
The Central Bank of the Dominican Republic (BCRD) recently reported that in the first four months of 2023, remittances received reached a figure of US$3.3 billion, showing a 2.7% growth over the same period of the previous year.
The BCRD explained that the economic performance of the United States was one of the main factors that influenced the behavior of remittances, since 85.2% of the formal flows in April came from that country, some 608.2 million dollars.
When the BCRD data is reviewed, it is observed that out of 9,856.5 million dollars of remittances received in 2022, 84.4% came from the United States. The same happened in 2021: out of 10,402.5 million dollars, 84.9% came from that country.
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