Dominican Republic Economy Facts
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.
- 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.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including DOM which represents the country of Dominican Republic. Check findjobdescriptions to learn more about Dominican Republic.
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)
US $ 81 299 M (2018)
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)
1.8 percent (2019)
Government debt’s share of GDP
50.5 percent (2018)
US $ 29,772 million (2017)
US $ 10,908 million (2018)
US $ 20,209 million (2018)
– 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