Moody's Investors Service has upgraded the Dominican Republic's long-term local and foreign-currency issuer and senior unsecured debt ratings to Ba2 from Ba3, with a stable outlook. This upgrade reflects the country's sustained high growth rates and economic diversification, which have enhanced income levels and overall economic strength. The Dominican Republic has averaged around 5% annual growth over the past 15 years, with tourism serving as a key growth engine attracting both domestic and foreign investment.
Moody's cited recent improvements to the country's institutional quality and policy frameworks, along with a track record of political stability and social cohesion, as factors strengthening the sovereign's resilience to shocks. Since 2020, the Dominican Republic has implemented several institutional reforms, including a new Fiscal Responsibility Law establishing clear fiscal rules to limit government spending and deficits.
The country's external position has also improved, supported by robust foreign direct investment, tourism receipts, and remittances, which help mitigate external vulnerability risks. These factors have contributed to historically high foreign-exchange reserves.
The stable outlook balances these strengths against structural fiscal challenges, including a narrow revenue base, weak debt affordability, and high foreign-currency exposure. Government revenue intake stands at just 16% of GDP, significantly lower than the 28% median for Ba-rated peers.
Moody's expects a general government fiscal deficit of around 3.2% of GDP in 2025 and approximately 3.0% thereafter, with debt stabilizing at around 48% of GDP over the next two years. However, debt affordability remains weak, with interest payments amounting to 21% of government revenue in 2024 – almost twice the median of Ba-rated peers.
The local-currency ceiling has been raised to Baa2 from Baa3, while the foreign-currency ceiling has been raised to Baa3 from Ba1.
The Dominican Republic's GDP per capita stands at $29,150 (2024), with real GDP growth at 5% and inflation at 3.3% for the same year.