According to the preliminary report by the Central Bank of the Dominican Republic (BCRD), the Dominican economy experienced a solid expansion of 5.0% in 2024, reaffirming its position as one of the most dynamic in Latin America. This growth aligns with official projections and highlights the strength of the country’s macroeconomic fundamentals despite ongoing global challenges.
Outstanding Economic Performance
The Dominican Republic’s real Gross Domestic Product (GDP) grew by 5.0% compared to 2023, exceeding national and international expectations. This growth underscores the Dominican economy’s resilience and positions it as a leader in the region, standing out among the 17 largest economies in Latin America. This achievement is particularly significant given the global economic uncertainty caused by fluctuating commodity prices, geopolitical tensions, and shifts in international trade dynamics.
Controlled inflation further bolstered the macroeconomic outlook, which closed 2024 at a remarkably low 3.35%, the lowest in six years. This figure fell comfortably within the Central Bank’s target range of 4.0% ± 1.0%, demonstrating a stable price environment. The controlled inflation provided much-needed relief to households and businesses, enhancing purchasing power and fostering economic confidence.
Tourism and Remittances Drive Growth
A key driver of this robust growth was the remarkable performance of the tourism sector, a cornerstone of the Dominican economy. In 2024, the country welcomed a record-breaking 11.2 million tourists, including 8.5 million who arrived by air and 2.6 million via cruise ships. This surge in tourism significantly boosted the hospitality industry, with the hotels, bars, and restaurants sector achieving an impressive growth rate of 9.6%. The record visitor numbers were attributed to strategic marketing campaigns, expanded airline connectivity, and a focus on diversifying tourist offerings to appeal to a broader demographic.
In addition to tourism, remittances played a crucial role in sustaining the Dominican economy. The country received a historic US$10.76 billion in remittances, reflecting a 5.9% increase compared to the previous year. These funds, sent predominantly by the Dominican diaspora in the United States, Europe, and other parts of the world, were instrumental in supporting household consumption, funding education, and driving investments in small businesses. The consistent rise in remittances underlines the strength of the country’s ties to its diaspora and its continued commitment to the nation’s economic well-being.
Foreign Investment and a Robust External Sector
The Dominican Republic also demonstrated its ability to attract foreign investment, a key component of its economic strategy. In 2024, foreign direct Investment (FDI) reached an impressive US$4.51 billion, surpassing the US$4 billion mark for the third consecutive year. This level of investment underscores the confidence of international investors in the Dominican economy, given its stability, economic potential, and business-friendly environment. FDI inflows were primarily directed toward key sectors such as tourism infrastructure, real estate, renewable energy, and manufacturing, further diversifying the economic base.
The export sector also posted strong results, with total exports rising by 7.0% year-on-year. National exports, particularly gold and cacao, contributed significantly to this growth. The expansion of free trade zones played a pivotal role in this success, enabling Dominican manufacturers to access global markets with competitive products. Additionally, initiatives to improve port infrastructure and streamline customs processes have made the country more attractive to exporters and trading partners.
Monetary Policy and Financial Stability
The Central Bank of the Dominican Republic maintained an active approach to monetary policy throughout 2024, effectively managing liquidity in the financial system to support economic growth. During the year, the Central Bank reduced its policy interest rate by 275 basis points, which helped lower borrowing costs, encourage investment, and sustain economic dynamism. This monetary easing also contributed to exchange rate stability, providing a stable environment for trade and investment.
The Dominican financial system remains a pillar of economic stability, characterized by high levels of solvency and profitability. As of the end of 2024, the banking system’s return on equity (ROE) stood at an impressive 22.8%, while the non-performing loan ratio was a low 1.4%, reflecting prudent risk management practices. These metrics highlight the robustness of the financial sector, which continues to play a crucial role in funding economic activities and supporting businesses of all sizes.
Outlook for 2025
Looking ahead to 2025, the Dominican Republic is well-positioned to sustain its strong economic performance. The Central Bank has adopted forward-looking monetary policies to foster continued economic dynamism while maintaining inflation and exchange rate stability. Combined with government initiatives to enhance infrastructure, promote innovation, and attract foreign investment, these measures are expected to reinforce the country’s growth trajectory.
Key sectors like tourism, remittances, and exports will likely remain vital drivers of the Dominican economy. The ongoing development of eco-tourism projects, luxury resorts, and cultural heritage initiatives will ensure the tourism sector thrives. Meanwhile, the steady growth of remittances will provide a reliable source of income for households and stimulate domestic consumption.
The government’s commitment to expanding trade agreements and integrating into global supply chains will further strengthen the Dominican economy’s external sector. Efforts to diversify exports and explore emerging markets will enhance resilience against global economic shocks, ensuring long-term sustainability.
In conclusion, the Dominican Republic’s impressive economic growth in 2024 reflects its strong fundamentals, strategic policymaking, and the resilience of its key sectors. With a favorable outlook for 2025, the country is poised to continue its trajectory as a regional leader in economic performance and stability.