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.

Country Risk

Dominican Republic Country Risk

BMI View:

Core Views

  • Bermuda's prolonged recession continued into 2014, and we now expect this economic contraction to continue over the coming years. We expect that an international crackdown on offshore financial centres such as Bermuda will lead to a decline in financial services activity, one of the key contributors to the island's economy. Although tourism will rise, it will not be enough to offset tempered insurance activities.

  • 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 poor growth prospects, Bermuda will remain politically stable over the next 10 years owing to the...

Dominican Republic Country Risk

BMI View:

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 fiscal crisis will result in decreased government spending, lower household consumption, and increased emigration, all weighing on growth.

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

Major Forecast Changes:

  • Puerto Rico will undergo a painful internal devaluation, leading to the continuation of its recession over the next five years. This devaluation will see wages fall and lay-offs...

Dominican Republic Industry Coverage (6)

Food & Drink

Dominican Republic Food & Drink

BMI View:

BMI View: We are turning more positive regarding economic growth in the Caribbean, as structural and financial reforms take hold in the region, tourism numbers pick up and growth becomes stronger in key markets like the US. The Dominican Republic will outperform other regional markets over the next five years. Nonetheless, small consumer bases will limit long-term investment opportunities, especially in the food retail sector.

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

Insurance

Dominican Republic Insurance

BMI View:

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

BMI View:

BMI View : The Dominican Republic's insurance market will continue to be one of the least developed in the Caribbean, with per capita premiums of just USD66.9 in the non-life sector in 2015 and a paltry USD8.3 in the life market. While the prospect of an interest rate reduction is heightening anticipation of increased interest in life insurance and growth in demand for property and motor vehicle insurance, this is balanced by the effects of a weak currency and slower economic growth.

...
Headline Insurance Forecasts (Dominican Republic 2013-2020)
2013

Mining

Dominican Republic Mining

BMI View:

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...

Telecommunications

Dominican Republic Telecommunications

BMI View:

BMI View: 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 the arrival of a third mobile operator would help to shake up the Trinidad & Tobago mobile market, we still expect the process to take years to play out, as licence fees are agreed,...

Tourism

Dominican Republic Tourism

BMI View:

BMI View: Arrivals growth in the Caribbean will pick up to 2.5% in 2016, reflecting improved visitor numbers from Europe and North America. The Dominican Republic, St Eustatius and Cuba are expecting the highest rate of arrivals growth, but all tourism markets except St Vincent will experience growth in 2016. 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 2.5% in 2016, to 33.5mn, reflecting an improvement from growth of only 0.7% in 2015. We expect the Dominican Republic, Cuba, St Eustatius and St Lucia to post the highest level of arrivals growth in 2016, at around 6%, but we note the positive sign that all Caribbean countries except St Vincent will experience...

Latest Dominican Republic Articles

  • An unsettled political and economic environment in the wake of the Brexit v...

  • We maintain our above-consensus forecast for the year, with Brent and WTI f...

  • The 2015-2016 El Niño episode had a severe negative impact on agricultural ...

Latest Dominican Republic Blogs

Latest Dominican Republic Podcasts

  • Chronic underinvestment in Venezuela's oil sector and mounting economi...

×

Download PDF

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.