DOMINICAN REPUBLIC: IS IT WORTH INVESTING?
We might think that a country that is in Central America and that is as small as the Dominican Republic, could be risky as an investment, but contrary to what you might think, let us expose you to the immense benefits of betting financially within this territory.
In the first place, it has been one of the fastest growing countries in Latin America from the past decades, and in the last year alone, the economic growth was 4.6%, now it is a country that is above the average of the Central American region and the Caribbean, since it has been maintained for a long time with a high growth rate, low inflation and a prosperous and stable economy.
In addition to that, the Dominican Republic’s economy has the best performance in Central America, after Panama. If we compare the economy of this country with the rest of South America the result is wonderful, since they have more than a decade with better economic indexes compared to the rest of the region. Besides, the government works hard to eradicate poverty in the country, helping lower classes to reach the middle class standard; establishing public policies that favor the most needed.
Some activities to achieve this include surprise visits to communities that require it, which is nothing more than a mechanism of direct interaction between the president and the communities, allowing them to provide public investments towards the areas that contain the greatest needs of said population. That is why they have applied actions such as technical assistance, organization of producers, and improvement of some infrastructures in order to significantly increase the level of employment and this has brought direct consequences in the increase of minimum and average wages.
“The DR has maintained a high growth rate, low inflation and a prosperous and stable economy”
STABILITY BEYOND WHAT ANYBODY COULD EXPECT.
We are happy to tell you that the Dominican Republic does not only depend on a gross income, as is the case of some neighboring countries, such as Venezuela and Mexico, whose dependence on oil usually results in a price variation that affects their economies, just as it happens to countries like Brazil and Argentina with agriculture. This is totally what the government of the Dominican Republic avoids, creating a variable economy, because when there are international phenomena that greatly affect a region, they maintain different active items and various national and international entries.
Their strongest income is tourism and family consignments, but they do not faithfully depend on them, since they have been able to develop other areas such as the industrial sector, free zones, mining sector, and real estate.
Although tourism is not a reliable sector for some investors, this country is very stable in this area, that usually is not subject to abrupt changes of highs and lows as in other countries or in other areas of the economy, and it has presented stable and constant growth.
The Dominican Republic, among its goals, received around 3 million tourists annually.However, positively, the country received 6 million tourists last year, of which about one and a half million were cruise ship visitors. After September 11th, when there was a worldwide impact on tourism, there has not been any phenomenon that has lowered the statistics of this country. Fortunately, natural disasters such as hurricanes, have not reached that country.
BENEFITS FROM INVESTING IN DOMINICAN REPUBLIC.
- The Dominican Republic is one of the countries that receives the most capital in the Caribbean and Central America.
- Maintains a fairly broad stability climate.
- It is constantly growing at very high rates.
- They have been many years of enjoying a stable environment and without change in policies.
- The country risk indicator is one of the lowest in Latin America (Below 300 basis points for the last 20 to 24 months)
- They have a free trade agreement with EE.UU
HOW DOES THE UNITED STATES AFFECTS DOMINICAN REPUBLIC?
- They receive many consignments from family members that come mainly from the USA. However, until now there have been no impacts due to Trump’s policies.
- Trump made a tax reform that may affect the Dominican Republic slightly, as there may be capital outflows from Latin America and the world to the United States, and that would generate an outflow of capital from the rest of the world to the United States.
- A drastic increase in the interest rate could affect them. However, the policy of the federal reserve has been very cautious.
- The president of the United States has not made any negative reference to this country, unlike the rest of the neighboring countries.
On the other hand, it is important to mention that the country receives between 2,000 and 4,000 million dollars each year in investment, which is a considerable amount for its size.
The country has important investments in mining, tourism, commerce and in real estate, but they are in search of more investors, and being a country with such a stable economy and policy, investing sounds quite tempting!.