A booming recovery for one of the region’s most powerful economies
Taking over the country in the middle of a global pandemic has certainly not been easy, but the country’s impressive economic indicators show the current Dominican government has been doing a remarkable job. The Central Bank’s economic growth projections have been revised upwards, reaching 11% in 2021, the best performance in nearly 30 years according to IMF’s Latinvex analysis. Similarly, the IMF predicts the country’s GDP will expand by 5.5% next year, making it the highest in the region. “One of our main objectives has been to achieve economic recovery, to reactivate all productive sectors, and to recover and create new jobs, so these are forecasts that speak very accurately about the robustness of our economy”, assures president Abinader.
This has been felt very clearly in the manufacturing industry, which registered a growth of 14.3% during the first half of 2021, being the sector that has better managed to overcome the challenges of the pandemic and maintain the country active. Part of this success is owed to the public-private strategic alliance promoted by the government since its early days. Like president Abinader explains, “The Dominican industrial sector is experiencing an awakening never seen before. Not only have production and exports increased, but jobs are recovering at a very good pace. To ensure that there is a good climate of stability that allows each Dominican to have a job, a strategic union with the business sector has been essential.”
Foreign direct investment has also benefited greatly from the government’s business-friendly mentality. At present, the Dominican Republic is the first destination country for FDI in the Caribbean, with USD $3 billion in 2021 and an expected 25% increase this year. Interestingly, these numbers are related to the pandemic-induced change of paradigm regarding the ways in which goods and services are produced, distributed and consumed. Since global value chains have been shortened, bringing production centers closer to consumer markets, what is now known as “nearshoring” has become the preferred choice. In this context, the Dominican Republic represents a very attractive “nearshore” alternative to Asia for U.S. manufacturers, who are now seeking to restructure their logistics and supply chains. “In this sense, our country is in a privileged position, enjoying a geographic location in the center of the Caribbean, with very stable economic foundations and enviable comparative and competitive advantages”, states president Abinader.