Dominican Republic Economy

Economy - overview:
The Dominican Republic is the largest economy in the Central American and Caribbean region. It is a lower middle-income developing country primarily dependent on natural resources and government services. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place, behind mining, in terms of export earnings. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Real estate tourism alone accounted for $1.5 billion in earnings for 2007. Remittances from Dominicans living abroad are estimated to be more than $2 billion dollars per year.

Sector of PiantiniFollowing economic turmoil in the late 1980s and 1990, during which the gross domestic product (GDP) fell by up to 5% and consumer price inflation reached an unprecedented 100%, the Dominican Republic entered a period of moderate growth and declining inflation until 2002, after which the economy entered a recession. This recession followed the collapse of the second-largest commercial bank in the country, Baninter, linked to a major incident of fraud valued at $3.5 billion during the administration of President Hipólito Mejía (2000-2004). The Baninter fraud had a devastating effect on the Dominican economy, with GDP dropping by 1% in 2003 while inflation ballooned by over 27%. All defendants, including the star of the trial, Ramon Baez Figueroa, were found guilty and convicted; one subpoena failed to be delivered upon the United States denial of extradition.

Despite a widening merchandise trade deficit, tourism earnings and remittances have helped build foreign exchange reserves. The Dominican Republic is current on foreign private debt, and has agreed to pay arrears of about $130 million to the U.S. Department of Agriculture's Commodity Credit Corporation.

According to the 2005 Annual Report of the United Nations Subcommittee on Human Development in the Dominican Republic, the country is ranked #71 in the world for resource availability, #79 for human development, and #14 in the world for resource mismanagement. These statistics emphasize national government corruption, foreign economic interference in the country, and the rift between the rich and poor.

Santiago de los Caballeros, the second largest city in the country. The Dominican Republic has become a trans-shipment point for South American drugs to Europe as well as the United States and Canada. Money laundering is favored by Colombian drug cartels via the Dominican Republic for the ease of illicit financial transactions.

Santiago De Los Caballeros; La Trinitaria, area of increasing development.The Dominican Republic enjoys a growing economy and a 2007 GDP per capita of $9,208, in PPP terms, which is relatively high in Latin America. In the trimester of January–March 2007 it experienced an exceptional growth of 9.1% in its GDP, which was actually below the previous year's 10.9% in the same period. Growth was led by imports, followed by exports, with finance and foreign investment the next largest factors. The service sector in general has experienced growth in recent years, as has construction. Economic growth takes place in spite of a chronic energy shortage, which causes frequent blackouts and very high prices.

Santo Domingo, the capital of the Republic is the source of most of its GDP and has become one of the leading cities of the Caribbean. The biggest tourist center in the country is the region of Bávaro
GDP (purchasing power parity):
$61.67 billion (2007 est.)
GDP (official exchange rate):
$36.4 billion (2007 est.)
GDP - real growth rate:
8.5% (2007 est.)
GDP - per capita (PPP):
$6,600 (2007 est.)
GDP - composition by sector:
agriculture: 11.7%
industry: 23.8%
services: 64.4% (2007 est.)
Labor force:
4.027 million (2007 est.)
Labor force - by occupation:
agriculture: 17%
industry: 24.3%
services: 58.7% (1998 est.)
Unemployment rate:
15.6% (2007 est.)
Inflation rate (consumer prices):
6.1% (2007 est.)
Investment (gross fixed):
18.8% of GDP (2007 est.)
Budget:
revenues: $7.423 billion
expenditures: $7.259 billion (2007 est.)
Public debt:
41% of GDP (2007 est.)
Agriculture - products:
sugarcane, coffee, cotton, cocoa, tobacco, rice, beans, potatoes, corn, bananas; cattle, pigs, dairy products, beef, eggs
Industries:
tourism, sugar processing, ferronickel and gold mining, textiles, cement, tobacco
Industrial production growth rate:
2.4% (2007 est.)
Electricity - production:
12.22 billion kWh (2005)
Electricity - consumption:
8.791 billion kWh (2005)
Electricity - exports:
0 kWh (2005)
Electricity - imports:
0 kWh (2005)
Current account balance:
-$2.231 billion (2007 est.)
Exports:
$7.237 billion f.o.b. (2007 est.)
Exports - commodities:
ferronickel, sugar, gold, silver, coffee, cocoa, tobacco, meats, consumer goods
Exports - partners:
US 67.1%, Belgium 3.7%, Finland 3.3% (2007)
Imports:
$13.82 billion f.o.b. (2007 est.)
Imports - commodities:
foodstuffs, petroleum, cotton and fabrics, chemicals and pharmaceuticals
Imports - partners:
US 44.8%, Venezuela 7.9%, Colombia 6.6%, Mexico 5.9% (2007)
Economic aid - recipient:
$76.99 million (2005)
Reserves of foreign exchange and gold:
$2.562 billion (31 December 2007 est.)
Debt - external:
$10.21 billion (31 December 2007 est.)
Stock of direct foreign investment - at home:
$12.75 billion (2007 est.)
Stock of direct foreign investment - abroad:
$59 million (2007 est.)
Currency (code):
Dominican peso (DOP)
Exchange rates:
Dominican pesos per US dollar - 33.113 (2007), 33.406 (2006), 30.409 (2005), 42.12 (2004), 30.831 (2003)
Fiscal year:
calendar year