COVID-19 crisis will interrupt Dominican GDP growth

Subject

The Dominican Republic and COVID-19.

Significance

Unlike much of the Latin America/Caribbean region, the Dominican Republic faces the COVID-19 pandemic from a position of macroeconomic strength and stability. Growth lost pace in 2019 but was still robust at 5.1%, while inflation stayed within the Central Bank target range, at 3.7%. The banking sector remains well capitalised with non-performing loans at low levels (1.6%) at the end of last year.

Impacts

• If the financing gap persists, the government will seek further credit in the markets, despite having to bear increasing yields.
• The general election will probably be postponed beyond July, with opposition candidate Luis Abinader likely to remain the frontrunner.
• An ongoing exodus of Haitians will continue, with unscreened incomers increasing contagion risks in Haiti.