The Dominican economy is showing signs of slowing down. GDP grew 2.7% in the first quarter, down 4.5% from the growth reported for the same period in 2024. This is expected as the country reacts to external influences.
N Digital reports that the DR has the recent buffer of the decline in oil prices and the recent depreciation of the US dollar in the local exchange market. Economist Henri Hebrard explained that the National Budget considered the barrel of oil would be at US$81.30 when it is averaging US$59.55. Likewise, the government had budgeted the peso to decline to RD$63.15 to the US$ when it is now hovering around RD$58.96.
Meanwhile, the Central Bank emphasizes the resilience of the economy. The Central Bank of the Dominican Republic (BCRD) reported that preliminary figures from the Monthly Economic Activity Indicator (IMAE) for March 2025 show a year-over-year expansion of 5.4%, significantly outpacing the 1.3% growth recorded in the same month last year.
The sectors leading growth are construction (14.5%), free zone manufacturing (11.3%), financial intermediation (11.3%), trade (8.9%), transport and warehousing (8.7%), and agriculture (5.2%).
After four consecutive months of negative year-over-year growth, construction saw a notable improvement in March 2025 with a 14.5% increase, contributing approximately 35% to the IMAE’s overall expansion. This rebound is attributed to rising local sales volumes of key infrastructure materials like cement and rebar compared to March 2024.
Free zone manufacturing experienced an 11.3% year-over-year increase in March, driven by strong external demand for its products. Exports surged by 12.9% during the month, reaching US$771 million and accumulating to US$1,985 million in the first quarter. Local manufacturing grew at a more modest 1.7%, supported primarily by pharmaceuticals and metal product production.
Financial intermediation saw a substantial 11.3% year-over-year increase due to a 12.3% expansion in private sector credit in both local and foreign currencies, equivalent to an additional RD$257,254.6 million compared to March 2024.
The trade sector registered an 8.9% increase in real value-added due to higher output of goods sold through retail establishments. Imports of tradable goods also rose by 12.9% year-over-year in March.
The hospitality sector (hotels, bars, and restaurants) saw a mild contraction of 0.5% in March, partly due to seasonal factors as Easter week fell in April this year compared to March in 2024. The sector was also impacted by a decline in non-resident air arrivals, particularly from the United States and Canada, reflecting global economic uncertainty. However, the Ministry of Tourism (Mitur) has actively promoted travel from other markets like Argentina and South America, helping mitigate this trend. Additionally, a significant increase in cruise ship passengers contributed to a 4.0% year-over-year expansion in total visitors to 1,144,680 in March, surpassing 3.3 million in the first quarter of 2025.
Agriculture grew by 5.2% year-over-year in March, driven by increased production of high-consumption items like avocados, rice, bananas, chicken, and eggs. Government support through technical assistance and financing for farmers played a crucial role in this growth.
The overall outlook is positive, reports the Central Bank. The strong performance in March contributed to an accumulated economic growth of 2.7% in the first quarter, marking an improvement from the 1.5% average seen in the first two months of the year. The Dominican economy has demonstrated resilience and a capacity for rapid recovery following periods of slowdown, particularly when certainty returns and expectations stabilize.
Read more in Spanish:
Central Bank
El Dia
N Digital
IMF
6 May 2025