IMF Executive Board Concludes 2025 Article IV Consultation with the Dominican Republic
IMF News, November 18, 2025
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Bibliographic details
- Published: November 18, 2025
Executive summary and context
- The Executive Board completed the Article IV Consultation for the Dominican Republic on November 12, 2025. The authorities need more time to consider the publication of the Staff Report prepared for this consultation.
- Growth slowed in late 2024 and the first half of 2025 due to increased uncertainty and tighter financial conditions; preliminary signs point to a revival in economic activity with credit, exports, and tourism growth picking up in recent months.
- Inflation remains close to target and is expected to average 3.7 percent in 2025.
- External balances are in line with fundamentals and desirable policies; the current account deficit is expected to narrow to 2.5 percent of GDP in 2025 and is fully financed by foreign direct investment (FDI).
Growth, inflation, and projections
- Growth:
- Real GDP: 2024 = 5.0; 2025 = 3.0; 2026 (projection) = 4.5; long-term trend = 5 percent.
- Inflation:
- Consumer price inflation (end of period): 2024 = 3.3; 2025 (expected average) = 3.7; 2026 (forecast) = 4.0.
- Monetary policy: monetary policy stance judged broadly appropriate; need to strengthen monetary transmission and gradually wind down exceptional liquidity measures.
- External sector projections:
- Current account deficit: expected to narrow to 2.5 percent of GDP in 2025 and remain around 2½ percent thereafter.
- Financing: current account deficit fully financed by FDI.
Fiscal position and structural priorities
- Fiscal outlook:
- Consolidated public sector overall balance (in percent of GDP): 2020 = -9.0; 2021 = -3.7; 2022 = -3.6; 2023 = -4.1; 2024 = -3.9; 2025 = -4.5; 2026 (projection) = -3.8.
- Consolidated public sector primary balance (in percent of GDP): 2020 = -4.3; 2021 = 0.7; 2022 = 0.6; 2023 = 0.8; 2024 = 1.1; 2025 = 0.5; 2026 = 1.0.
- Consolidated public sector debt (in percent of GDP): 2020 = 71.4; 2021 = 61.8; 2022 = 58.8; 2023 = 59.7; 2024 = 58.1; 2025 = 59.2.
- Key fiscal recommendations from Directors:
- Maintain prudent fiscal policies and support increased public investment in line with the medium‑term fiscal framework and Fiscal Responsibility Law.
- Focus consolidation on revenue mobilization and improving spending efficiency, including removing generalized subsidies while safeguarding necessary social spending.
- Implement a well‑communicated medium‑term revenue strategy to lay the groundwork for broader fiscal reform.
- Full implementation of the Electricity Pact is essential to limit fiscal risks and ensure resilience; expected reduction of electricity sector losses and improved targeting of energy subsidies will help reduce deficits and debt and create space for planned increases in public investment.
- Structural reform priorities:
- Advance reforms for the electricity sector.
- Improve governance, advance labor and social security reforms, and efficiently invest in infrastructure, education, and health.
- Enhance disaster risk management frameworks and incorporate natural disaster considerations into fiscal policy.
Financial sector and monetary framework
- Financial health:
- Banking system assessed as healthy with limited systemic risks.
- Progress noted on enhancing financial sector supervisory and regulatory framework.
- Priorities: adoption of Basel II and III standards, development of a macroprudential policy toolkit, strengthening AML/CFT framework.
- Financial indicators:
- Broad money (M3): 2020 = 21.2; 2021 = 13.4; 2022 = 14.4; 2023 = 11.3; 2024 = 10.3; 2025 = 9.5.
- Credit to the private sector (annual change): 2020 = 5.3; 2021 = 11.6; 2022 = 16.6; 2023 = 19.7; 2024 = 13.5; 2025 = 12.3; 2026 = 12.6.
- Net domestic assets of the banking system: 2020 = 2.5; 2021 = 11.2; 2022 = 9.9; 2023 = 19.0; 2024 = 9.2; 2025 = 10.2.
- Policy interest rate (latest available): 2020 = 3.5; 2021 = 7.0; 2022 = 6.0.
- Average bank deposit rate (1-year; latest available): 2021 = 2.3; 2022 = 8.6; 2023 = 9.8.
- Average bank lending rate (1-year; latest available): 2021 = 13.6.
External balances and reserves
- Balance of payments and external debt:
- Current account (in percent of GDP): 2020 = -2.8; 2021 = -5.8.
- Goods, net (in percent of GDP): 2020 = -8.7; 2021 = -12.4; 2022 = -15.1; 2023 = -13.1; 2024 = -12.8; 2025 = -12.0; 2026 = -11.4.
- Services, net (in percent of GDP): 2020 = 1.8; 2021 = 3.9; 2022 = 4.8; 2023 = 6.7; 2024 = 6.6; 2025 = 6.4.
- Income, net (in percent of GDP): 2020 = 5.7; 2021 = 2.7; 2022 = 2.9; 2023 = 2.6.
- Change in reserves (-increase): 2020 = -2.4; 2021 = -1.3; 2022 = 1.7.
- Gross international reserves (GIR, in millions of US dollars): 2020 = 10,752; 2021 = 13,033; 2022 = 14,408; 2023 = 15,464; 2024 = 13,388; 2025 = 14,448; 2026 = 14,973.
- Total external debt (in percent of GDP): 2020 = 56.6; 2021 = 47.8; 2022 = 39.9; 2023 = 43.2; 2024 = 43.7; 2025 = 45.7; 2026 = 45.2.
- Of which: Consolidated public sector (in percent of GDP): 2020 = 40.4; 2021 = 35.3; 2022 = 33.2; 2023 = 34.2; 2024 = 34.6; 2025 = 36.0.
- Exchange rate indicators:
- Exchange rate (RD$/US$ - period average): 2020 = 56.5; 2021 = 57.1; 2022 = 55.0; 2023 = 56.0; 2024 = 59.4.
- Exchange rate (RD$/US$ - eop): 2020 = 58.2; 2021 = 57.3; 2022 = 56.2; 2023 = 58.0; 2024 = 61.1.
- Real effective exchange rate (eop, - depreciation): 2020 = -8.1; 2021 = 6.5; 2022 = 6.3; 2023 = -0.4; 2024 = 0.0.
Risks, vulnerabilities, and policy recommendations
- Balance of risks:
- Tilted to the downside, with external risks from global financial conditions and heightened uncertainty, and domestic vulnerability to natural disasters.
- Upside possibilities include trade diversion and FDI inflows from changes in global trade policies; robust implementation of reforms and public investment plans could generate upside growth.
- Downside domestic risk: delays in implementing authorities’ reform and public investment plans could weigh on growth.
- Policy recommendations and priorities:
- Continue prudent fiscal policies, improve revenue mobilization, and enhance spending efficiency.
- Reduce electricity sector losses and better target energy subsidies to lower fiscal risks and free space for investment.
- Strengthen monetary transmission, develop domestic financial markets, and allow continued exchange rate flexibility with interventions focused on smoothing large shocks and rebuilding buffers.
- Advance financial sector regulatory reforms (Basel II/III, macroprudential toolkit, AML/CFT).
- Implement comprehensive disaster risk management and integrate natural disaster considerations into fiscal policy.
Executive Board Assessment
- Directors commended sustained efforts to strengthen policies and institutions and advance business‑friendly reforms that supported strong macroeconomic performance over two decades.
- Directors welcomed expectations of accelerating growth and well‑anchored inflation, and agreed the country is well positioned to absorb shocks given strong fundamentals and policy space.
- Directors urged continued prudent policies and steadfast implementation of the reform agenda to accelerate growth and enhance resilience, highlighting the importance of electricity sector reforms and broader structural measures to achieve the Meta2036 Plan.
Selected economic indicators (highlights)
- Population (millions, 2024): 10.8
- GDP per capita (2024, U.S. dollars): 11,542
- Quota: 477.4 millions SDRs / 0.10% of total
- Poverty (2023, share of population): 23.0
- Extreme poverty (2023, share of population): 3.2
- Main exports: tourism, gold, tobacco
- Key export markets: U.S., Switzerland, Haiti
- Adult literacy rate (2021, percent): 95.5
IMF Communications Department; Press Release No. 25378; November 18, 2025.