The Dominican Republic has the potential to become an advanced economy in the next 40 years, according to specialists of the International Monetary Fund (IMF), informed Friday the Ministry of Finance of the Caribbean country.
In an article, the experts point out that, “going forward, there is reason to believe that the Dominican Republic can maintain its high growth. IMF staff estimates a potential growth of 5 percent per year, similar to the average of the last 50 years”.
According to the Dominican Ministry of Finance, the text recognizes that “the Dominican economy has been one of the most dynamic and resilient in the Americas over the past two decades and has experienced a remarkable post-pandemic recovery, supported both by sound policies adopted by the authorities and positive spillovers from the global economy”.
It also highlights the country’s remarkable and rapid progress in terms of income convergence, which implies a reduction in the gap between the richest and poorest economies.
“Dominican Republic has exhibited the highest average speed of convergence or ‘blue shift’ in Latin America in the last 50 years,” indicate the specialists, who detail that in that time said speed has increased from an average of 3 percentage points to almost 8 percentage points per decade.
The good data are the result of different factors, such as the implementation of sound policies, especially by the Central Bank, improvements in the political framework, a more diversified export base and the structural flexibility of the economy to changing global conditions.
The authors also refer to the reduction of poverty and inequality in the Caribbean country: progress “has impacted the average Dominican family, whose purchasing power has quadrupled in the last 50 years, allowing them to enjoy a better quality of life and greater economic opportunities”.
Following the last visit to the Dominican Republic by an IMF delegation last June to gather information and analyze the economic situation and policies with the authorities, the organization recommended focusing its short-term policies on maintaining macroeconomic and financial stability and advancing with structural reforms to promote “inclusive and resilient growth”, according to a statement issued at the time.
The mission stated that the Dominican Republic’s economic outlook is positive, although downside risks dominate in the short term.