Dominican Republic

In-depth country-focused analysis on the Dominican Republic's economic, political and operational risk environment, complemented by detailed sector insight

Dominican Republic

Our comprehensive assessment of the Dominican Republic's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect the Dominican Republic, as well as the latest industry developments that could impact the Dominican Republic's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in the Dominican Republic before your competitors.

Dominican Republic Country Risk

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Core Views

  • We expect that Bermuda will experience moderate economic growth over the coming years, supported by the construction and tourism sectors. However, the island faces several notable risks to this forecast, including a crackdown on offshore financial centres such as Bermuda in the wake of the 'Panama Papers' scandal, a slowdown in the US economy, a loss of preferred EU market access following the 'Brexit' vote and the re-opening of Cuba to US visitors.

  • Bermuda's current account will remain in surplus over the course of our 10-year forecast period, though the surplus will decrease to 10.4% of GDP by 2024, down from 17.4% in 2014, in line with our projections for slowing exports of tourism services and secular decline in off-shore finance.

  • Despite moderate growth prospects, Bermuda will remain...

Dominican Republic Country Risk

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Core Views:

  • Growth in the Dominican Republic will moderate amid declining gold output, but relatively robust private consumption and tourism will help sustain the economy.

  • Puerto Rico's economy will remain in recession in the next several years, as fiscal austerity and a restructuring of the territory's debt depress household and government consumption.

  • The Cuban economy holds immense potential given the island's large size and proximity to the lucrative US market. However, investment and growth will depend on political dynamics on both sides of the Florida Straits.

Major Forecast Changes:

  • We have delayed our expectations for the unification of Cuba's dual exchange rate regime, and we now expect it will take place by...

Dominican Republic Industry Coverage (6)

Dominican Republic Food & Drink

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BMI View: Supported by the strengthening consumer outlook and rising tourist arrivals, growth in the Caribbean food and drink sector will accelerate gradually over the next five years. We hold the view that the Dominican Republic and Jamaica will be the key outperformers, while Trinidad & Tobago and Barbados will experience the slowest growth. Small market sizes and challenging geographies will remain the key obstacles limiting investor interest.

Dominican Republic The Regional Outperformer
Select Countries - Food Sales (% chg y-o-y, USD terms)

Dominican Republic Insurance

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BMI View: Currency weakness will continue to plague the dollar terms returns of many of the Caribbean insurance sectors covered in this report. Offshore business in Barbados and the Cayman Islands, amounting to around USD45bn annually, dwarf the domestic sectors in the region. Health insurance, an underdeveloped line of business, is likely to outperform in many of these markets over the five-year forecast period.

The insurance markets of the Caribbean, particularly offshore business in Barbados and the Cayman Islands, but also domestic sectors, are heavily tied to the economic fortunes of the United States and, to a lesser extent, Canada. The ongoing recovery in both major North American markets should boost the fortunes of the region's insurers, driving demand for offshore reinsurance and captives, as well as boosting domestic economies. On the whole, regulation...

Dominican Republic Insurance

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BMI View : The insurance industry in the Dominican Republic is among the least developed in the Latin America and Caribbean region. Despite a relatively benevolent economic climate, we see little sign of this scenario changing over the medium-term, with penetration and density set to remain at embryonic levels. However, we see potential for expansion in certain areas of the market, such as the health and personal accident insurance, where premiums are growing rapidly, albeit form a low base. While both the life and non-life sector are highly consolidated at the higher end of the market, the plethora of smaller indigenous players sitting below the leading providers presents an opportunity for investors and new entrants, and may lead to increased merger and acquisition activity.

Headline Insurance Forecasts (Dominican Republic 2013-...

Dominican Republic Mining

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BMI View: Mining sectors across Central America and the Caribbean will see varying growth prospects in 2020. The region has significant untapped mineral potential, yet a range of business environments and operational challenges will lead to uneven growth.

Select Countries - Mining Industry Value
2014e 2015e 2016f...

Dominican Republic Telecommunications

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BMI View: We have not made significant revisions to our Caribbean outlook in the Q416 report. We retain the view that increasing competition in the Caribbean telecoms markets has potential to enhance innovation and improve customer choice. The announcement in May 2016 that Jamaica had launched a third mobile operator increases the prospects of competition in that market. Jamaica's mobile market is currently a duopoly between Digicel and LIME. Although th...

Dominican Republic Tourism

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BMI View: Arrivals growth in the Caribbean will increase 4.5% in 2016, reflecting improved visitor numbers from Europe and North America. Puerto Rico, Cuba, Bonaire and Guyana are expecting the highest rate of arrivals growth, but all tourism markets except Belize will experience growth. However, the outbreak of the Zika virus from late 2015 could pose downside risks to 2016 arrivals forecasts.

We currently expect arrivals to the Caribbean to grow by 4.5% in 2016, to 42.3mn, reflecting a slight moderation from growth of 5.2% in 2015. We expect Puerto Rico, Cuba, Bonaire and Guyana to post the highest level of arrivals growth in 2016, at around 5....

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