A recent International Monetary Fund (IMF) staff mission to the Dominican Republic has concluded its preliminary assessment of the country's economic situation as part of the 2025 Article IV consultation. The findings highlight a strong economic rebound in 2024, with real GDP expanding by 5 percent, driven by robust exports and strong credit growth during the first half of the year.
The IMF staff noted that "the credibility of the inflation-targeting regime has helped maintain inflation within the BCRD’s target since late 2023—averaging 3.6 percent y/y in 2025—with inflation expectations well anchored." They also reported that the current account deficit narrowed to 3.3 percent of GDP in 2024, fully financed by foreign direct investment (FDI), and that "the external position remained broadly in line with fundamentals and desirable policies." The budgetary central government deficit for 2024 was reduced to 3.1 percent of GDP due to one-off revenues offsetting higher energy subsidies, while "the banking sector remains resilient, well-capitalized and highly profitable."
Despite high uncertainty and tighter financing conditions affecting the economy in early 2025, policy measures are expected to support continued growth. According to IMF staff projections, real GDP growth is anticipated at around 3 percent for this year. They stated that "the BCRD’s liquidity measures enacted in June and the reformulated budget’s fiscal stimulus should support a pick-up in activity in the second half of the year and help to close the output gap." Looking ahead, growth is expected to gradually return to potential levels supported by investment and productivity gains.
Inflation is forecasted to remain near the central bank's target at around four percent. The current account deficit is projected at approximately two-and-a-half percent of GDP, again financed by FDI. However, an increase in capital spending from a revised budget will likely raise the central government deficit to about 3.5 percent of GDP for 2025 before gradual fiscal consolidation resumes under existing fiscal rules.
The report identifies downside risks linked mainly to external uncertainties such as global financial conditions and natural disasters but notes that "the DR is well positioned to weather the impact." Delays in reforms—particularly those targeting electricity sector deficits—could pose additional challenges for fiscal stability. Conversely, changes in global trade policies could benefit Dominican Republic through increased trade diversion and FDI flows.
IMF staff emphasized that "near-term policies should remain focused on closing the output gap, safeguarding macro-financial stability, and navigating elevated uncertainty," stressing further coordination between monetary and fiscal policy as essential for effectiveness.
For medium-term prospects, authorities are encouraged "to build on their steadfast efforts to further advance policy frameworks and reforms" aimed at promoting private investment, inclusive growth, and job creation. The ongoing dialogue among public officials, private sector representatives, and civil society was described as promising for these initiatives.
During their visit in Santo Domingo, IMF staff met with Central Bank Governor Héctor Valdez Albizu; Minister of Finance Magín Diaz; other senior officials; as well as representatives from civil society and business sectors. In their statement they expressed gratitude: "The team would like to express its sincere gratitude to the authorities for their exceptional hospitality, full cooperation, and open, frank and productive dialogue."