Economical overview
Agricultural exports have traditionally been
the mainstay of the Dominican economy, which, however,
has gained a wider base since the 1980s. Tourism, the
telecom sector and the economic free zones have grown so
that the service sector now accounts for the largest
share of gross domestic product (GDP) and also for most
jobs.
Growth has at times been high during the 2000s (since
2015 it has been highest in all of Latin America), but
one problem is that it has largely occurred in the free
trade zones and the tourism sector without any major
impact in the general economy. Income disparities
continue to be large, and deficiencies in the financial
system, including poor tax collection, have made it
difficult to achieve a real level of income.
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Countryaah.com:
Major imports by Dominican Republic, covering a full list of top products imported by the country and trade value for each product category.
By the middle of the 1990s, President Leonel
Fernández's government had quite quickly managed to get
the then-dominating Dominican economy (see Modern
history) on the right path, including a tight budget,
tax reform, reduced number of government office
employees and reduced electricity subsidies for
households. Growth accelerated and increased from just
over 1 percent in 2004 to just over 10 percent in 2006 -
the economy was one of the fastest growing in the world.
Then came the global financial crisis, which caused a
break in trade and consumption and resulted in a sharp
increase in the budget deficit. The Dominican Republic
applied for and received a support package worth close
to US $ 1.7 billion from the International Monetary Fund
(IMF) at the end of 2009.
However, growth recovered from 2010 and there were
some bright spots in the mid-2010s. A tax reform in late
2012 has meant that tax revenues, which previously
amounted to only about 13 percent of GDP, have
increased. Lower energy costs, partly due to a large
part of the "oil debt" in the so-called Petrocarii
agreement with Venezuela (see Natural Resources and
Energy), together with cuts in government spending,
contributed to reducing the budget deficit from 6.6 per
cent of GDP 2012 to 2.6 percent in 2016. At the same
time, the high official unemployment rate has decreased,
although underemployment is still relatively widespread
and a large proportion of Dominicans are active in the
"black" sector and are mainly outside the formal
economy.
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The dependence on loans and assistance from abroad
remains high, especially the dependence on the United
States. More than half of the country's exports go there
and a large proportion of tourists come from there, as
do direct investment. Money shipments from Dominicans
living in the United States are estimated to amount to
roughly as much as one-third of the value of exports and
two-thirds of tourism revenue.
The electricity supply has been a grief child and
according to the World Bank has constituted a serious
brake block in the economy. Electricity subsidies are
expensive for the state but difficult to phase out. Lack
of investment and neglected maintenance has created a
vicious cycle of high costs, recurrent power cuts,
extensive electricity thefts and poor collection of
electricity bills (see Natural Resources and Energy).
When the IMF demanded higher electricity prices in late
2011 to extend its loans, the government said no to
avoid teasing voters and causing social unrest.
Electricity and fuel subsidies were a major contributing
factor to a significantly increased foreign debt between
2000 and 2010.
However, in a report in August 2017, the Dominican
Republic received praise from the IMF for the positive
economic development since then. A year earlier, the
country had also repaid its outstanding debt to the
bank, which explained that it was free to seek new loans
if needed. At the same time, the IMF believed that power
must be taken against corruption and for a leveling of
income among the inhabitants.
FACTS - FINANCE
GDP per person
US $ 7,650 (2018)
Total GDP
US $ 81 299 M (2018)
GDP growth
7.0 percent (2018)
Agriculture's share of GDP
5.5 percent (2018)
Manufacturing industry's share of GDP
13.1 percent (2018)
The service sector's share of GDP
58.9 percent (2018)
Inflation
1.8 percent (2019)
Government debt's share of GDP
50.5 percent (2018)
External debt
US $ 29,772 million (2017)
Currency
Dominican peso
Merchandise exports
US $ 10,908 million (2018)
Imports
US $ 20,209 million (2018)
Current account
- US $ 1,160 million (2018)
Commodity trade's share of GDP
38 percent (2018)
Main export goods
electronics, textiles, cigars, sugar, nickel, bananas
Largest trading partner
USA, Venezuela, Haiti, China, Colombia, Netherlands
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