The Dominican Republic has one of the biggest, most resilient growth economies in Latin America. Behind the country’s average 6% yearly growth, and its low and stable inflation, stands the Central Bank and his governor for almost 24 years, Mr. Hector Valdez Albizu. “The main achievement of this institution has been preserving macroeconomic stability”, says Mr. Valdez, acknowledging the rocky patches too, particularly the major 2003’s economic crisis that costed the country around 20% of its GDP.

As a testament to its resilience, the Central Bank managed not only to recover but to profit from it. They approved 18 regulations of the Monetary and Financial Law to strengthen prudential norms, and from 2004 onward the regulation and supervision of the Dominican financial system improved significantly and the economy returned to growth and stability.

In 2020, to mitigate the effects of the COVID-19 crisis, the Central Bank responded quickly by taking monetary flexibilization measures. They reduced the monetary policy rate at 150 basic points to its historic minimum of 3.0% yearly, lowering the active interest rate from 14% to 9.5%; implemented a liquidity provision program of approximately 5.0% of GDP that channeled 92 thousand loans and offered debt restructuring through financial intermediaries; froze risk classifications for debtors and provisions
in levels prior to the pandemic; and secured the disbursement of US$650 million through the International Monetary Fund’s Quick Financing, to benefit the most vulnerable sectors and preserve the greatest number of companies and jobs.

These measures brought an accelerated recovery of the economy, and since June 2021 there is a gradual return of the resources through the liquidity provision program. The banks continue to present high levels of solvency (19.1%); until July 2021, a high profitability (23.5% ROE and 2.3% ROA) and low arrear coefficients (1.6%); private loans and deposits kept growing at around 10% and 12% respectively, showing this sector has actually surpassed the numbers during the pandemic.

On the other hand, the Dominican Republic is one of the region’s first receptors of FDI, reaching USD $3 billion in 2019. While in 2020 it lowered to USD $2,55 billion, 2021’s fast economic recovery and the numerous incentives available have set high expectations. There are several laws that hold tax incentives and provide juridic protection for investors in alignment with SDGs’ goals; and many sectors offer interesting FDI opportunities like tourism, the free trade zones, mining, and the film industry.

Nowadays, growth has been revised upwards to reach 11% in 2021, and nominal GDP is expected around US$91,5 billion, surpassing pre-pandemic nominal production levels, with one of the region’s best projected growth of 5.0-5.5%. Furthermore, as the country looks towards Middle Eastern markets new business opportunities are to be expected for the exportation of agricultural and consumer products like tropical fruits and cigarettes, which have been expanding their presence in this region, as well as new possibilities for joint ventures, like the clean energy power plants and port infrastructures that are currently being developed following this model.

Since taking office, Mr. Hector Valdez Albizu and his team have managed to take the country’s economy forward from debt and zero reserves in 2003 to their current USD $13 billion. “One of the biggest wins in my administration has been keeping the macroeconomic stability of the country, and succeeding in financial and currency management. I feel very proud of keeping the economy growing with an autonomous Central Bank”, assures Mr. Valdez.