IMF Projects 2026 Economic Acceleration for the Dominican Republic

• The International Monetary Fund (IMF) concluded its 2025 Article IV consultation and reported that the Dominican Republic continues to show strong economic fundamentals, manageable risks, and enough policy flexibility to respond to adverse scenarios. While the detailed technical report is still pending approval, the IMF released an official statement outlining the country’s current performance and expectations for the coming years.
• According to the Fund, the Dominican economy slowed toward the end of 2024 and during the first half of 2025 due to rising global uncertainty and tighter international financial conditions. However, recent indicators point to a gradual recovery supported by expansive fiscal and monetary measures. Credit activity, exports, and tourism have strengthened, and inflation remains under control, with an estimated average of 3.7% for 2025.
• Looking ahead, the IMF projects economic growth of 4.5% in 2026, bringing the country closer to its long-term trend of around 5%. The current account deficit is expected to stay near 2.5% of GDP and be fully financed by foreign direct investment, underscoring sustained investor confidence.
• Although external risks continue to outweigh positive factors, driven by global uncertainty, shifts in financial conditions, and vulnerability to natural disasters, the IMF emphasised that the Dominican Republic is in a strong position to handle potential shocks thanks to solid macroeconomic foundations, adequate international reserves, a stable banking system, and room to apply countercyclical policies.
• That said, the Fund stressed the importance of advancing structural reforms. It encouraged the government to move forward with tax reform aimed at increasing revenue by reducing generalised subsidies while protecting social spending, and to adopt a medium-term revenue strategy as the framework for broader fiscal changes. It also highlighted the need to fully implement the Electricity Pact to reduce sector losses and lower fiscal pressure. Improvements in governance, the labour market, and social security, aligned with the Meta 2036 plan, remain essential, as does increased investment in infrastructure, education, and health to support more inclusive and competitive growth.
• Finally, the IMF described the Central Bank’s monetary policy as appropriate and recommended maintaining exchange rate flexibility, limiting foreign exchange intervention to significant shocks, strengthening the monetary transmission mechanism, and gradually phasing out extraordinary liquidity measures. It also noted that the financial system remains sound with low systemic risks, encouraging continued progress in regulation and supervision, the implementation of Basel II and III standards, and further improvements in anti–money laundering and counter-terrorism financing policies.

(Source: Dominican Today)