Robust external performance and moderate growth, with rising inflation and oil shock risks
The Dominican economy maintained a favorable performance through April 2026, although signs of moderation have begun to emerge. Economic activity expanded by 4% y/y during January–April, supported by sectors such as mining, tourism, education and financial services. Employment kept growing, but the increase was accompanied by rising informality, and a decline in private salaried employment.
Headline inflation simultaneously reached 5.11%, exceeding the upper limit of the Central Bank’s target range for the first time in nearly three years, largely due to higher international oil prices. In response, the Central Bank maintained a neutral monetary policy stance, while the external sector recorded one of its strongest performances in decades, supported by a record current account surplus, high international reserves and record levels of exports and tourism revenues.
Revenues and expenditures continued to grow at similar rates, with fuel and electricity subsidies becoming the main source of pressure on public finances.
From a broader perspective, two issues are likely to shape the economic outlook in the coming months. The first is the development of the conflict in the Middle East, and its impact on international oil prices. Historical experience suggests that the effects on inflation, economic growth and public finances will depend largely upon the persistence of the oil shock, rather than upon the oil price level itself. The second is the early configuration of the political landscape ahead of the 2028 elections. Recent surveys indicate a decline in support for the ruling PRM; a more balanced distribution of political preferences among the main parties; and continued public concern over the rising cost of living.
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