Speaking to the audience of the American Chamber of Commerce luncheon on 10 April 2024, President Luis Abinader forecasts that with economic reforms, institutional consolidation, and keeping with the present growth trend of the past three years, the Dominican economy could double in around a decade.
“That is, by 2036 our economy can be twice as large as it is today. We can do it as an objective, a national goal, but always united, the productive sectors and the current and future rulers,” says the President and candidate for re-election, as reported in a press release on the conference.
Abinader said that if he is reelected he will call for the national unity front, and ask for the participation of opposition parties. He says he would be launching fiscal reform, but that this needs to be a comprehensive reform, that is seen as “relaunching of the Dominican Republic.”
For years, fiscal reform has simply brought a widespread increase in taxes while governments continue wasteful spending. Small businesses and entrepreneurs are crippled by taxes that seem to have been created with big business in mind. The President now proposes a different approach but details have not been forthcoming yet.
During the President’s presentation, the spoke of how the Dominican Republic is a middle-income country that at the end of 2023 had a per capita income amounted to more than US$11,300 a year.
He stressed that since 2020, only two countries in Latin America have experienced accumulated economic growth greater than that of the Dominican Republic and that so far in 2024, growth is above the historical average.
“All this has allowed the Dominican Republic to achieve an improvement in its risk rating by Standard & Poors and its outlook by Moody’s and Fitch, with important benefits for the nation’s financial future, both due to the reduction of cost of future financing, as well as for attracting investment,” highlighted the President.
The Dominican Republic is one of the most economically and politically stable in the region.
“Our inflation is one of the lowest in Latin America, the country achieved convergence to the target range in May 2023, being one of the first countries in Latin America to reach that objective. “However, we continue to be concerned about this issue and we continue working to mitigate its effects,” he said.
The presidential candidate affirmed that his government has generated an excellent climate of trust, which has allowed private investment to be attracted to the country in historically high levels.
“This is evident by looking at the investment component of GDP, which has gone from an average of 24.9% from 2001 to 2020, to 32% from 2021 to 2023,” he said when addressing the business gathering on 10 April 2024 in Santo Domingo.
He highlighted the contributions of export manufacturing to the economy. He mentioned that free zones exports were up 28.7% in 2023, compared to the pre-pandemic year of 2019. He said free zone exports reached a record US$8 billion in 2023, and are now 67.5% of total exports. Free zones have a soft tax regime.
The World Bank forecasts the Dominican Republic will grow 5.1% in 2024 and 5% in 2025 and 2026.
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N Digital
11 April 2024