In its scorecard on the Dominican Republic, the IMF team that visited from 29 May to 13 May to hold the 2022 Article IV Consultation discussions concluded that the Dominican Republic has experienced a strong recovery from the pandemic, supported by well-sequenced policies, an agile reopening and global growth.
The IMF stated that the recovery allowed the authorities to take steps to secure policy sustainability, placing the country in a good position to face challenges from global developments. Likewise, the IMF states that ongoing and planned reforms have the potential to improve policy frameworks and foster inclusive growth over the medium term.
IMF team leader, Esteban Vesperoni issued the following statement:
“The Dominican Republic’s dynamic economy continued to show remarkable resilience to global shocks. This was supported by sound policies, monetary policy support, a nimble Covid vaccination campaign and a well-attuned reopening that allowed the economy to make the most of the global rebound last year. This resilience and strong signals of policy sustainability are placing the Dominican economy in a good position to face emerging global challenges going forward.
“The financial system remains resilient and continues to support the economy despite the unwinding of pandemic-related regulatory flexibility.
“The outlook points to a continued recovery, though global developments pose risks. GDP growth would converge to 5 percent—around its potential—and inflation would return to the target range by next year as the impact of global shocks recedes.”
The IMF recommends the government broaden the tax base and streamline exemptions while calibrating the distributional impact to aid medium-term inclusive fiscal consolidation, while maintaining policy space for critical spending.
The IMF also backs continued reforms to support growth. The mission had praise for the government’s zero-bureaucracy initiative and the new customs law. It calls for more investment in infrastructure and human capital, more flexible and formal labor markets, educational quality and labor market participation of women and climate change policies to further unlock growth potential.
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IMF
17 May 2022