Dominican Republic 

Dominican Republic country policy

Policy established 12 September 2006

• ILC, bank guarantee or central public guarantee (unconditional)
• The country ceiling is 1000 mln euro
• Early warning signal 150 mln euro
• - of which was used as at 2012-02-29 9 mln euro

Country class: 5

Dominican Republic country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  24 June 2011
Country :  DOMINICAN REPUBLIC  

Political Situation
Reasonably Stable

Head of state
President Leonel Fernandez.

Form of government
Government of the Partido de la Liberación Dominicana.

Internal Economic Situation
Less High Gdp-Growth

General situation
Very US-depending economy: trade, investments, tourism, private remittances. In 2010 real GDP-growth reached 7.8% due to fast increase of private consumption (7.7%), fixed investments (17.6%) and exports (11.6%). According to the Q1-figure (+4.3%), real GDP-growth is expected to be less high in 2011, also due to fiscal constraints (IMF-program) and weaker investments. Poor management of the troubled state-run electricity sector is leading to high costs and poor service, harming business environment. After a surge in  2010, inflation has accelerated even further this year (to 8.4%) due to risen food and fuel prices. Rather high corruption: 101st of 178 on the TI Index.  Banking sector is in better shape compared to the 2004 crisis. 
 
External Economic Situation
Very Weak

Main sources of foreign exchange
Tourism, private transfers, maquiladora (industrial) products, sugar, tobacco, nickel.

Main foreign markets
United States (60%), Haiti (12%).

Main expenses of foreign exchange
Consumer goods (27%), raw material/intermediate products (destined for maquilas).
 

Balance of payments 
Risen trade deficits because importgrowth has exceeded surge in exports in 2010/’11. These shortfalls have to be financed by tourist receipts and capital imports (FDI but also official lending of appr. $1 bn per annum and commercial borrowing by issue of bonds).