The Dominican Republic has demonstrated remarkable resilience in the face of the Covid-19 pandemic, defying the odds with a robust economic performance. Despite its heavy reliance on tourism and international travel, the country’s gross domestic product (GDP) experienced a remarkable rebound, growing by 12.3% in 2021 and 4.9% in 2022. Notably, the tourism sector not only recovered but also surpassed pre-pandemic levels in 2022, contributing to this impressive economic rebound. Additionally, foreign direct investment (FDI) and exports have reached record highs, showcasing the country’s economic momentum.
While tourism remains a vital driver of the Dominican economy, it is not the sole one. The nation has been making significant investments in various sectors, including energy, transportation, logistics infrastructure, and manufacturing. Emerging creative and innovative industries are also attracting the attention of foreign investors. To sustain this growth trajectory, new strategies to nurture local talent and attract anchor investors in these new sectors will be crucial.
The Dominican Republic wasted no time in recovering as travel restrictions eased worldwide. Tourist arrivals began to increase in 2021, and in 2022, the country welcomed more than seven million international visitors, surpassing pre-pandemic levels. This achievement places the Dominican Republic among the select few countries that managed to exceed their pre-Covid tourism levels last year.
Investors have also returned to the Dominican Republic, with announcements of $3.5 billion in greenfield FDI projects in 2022, marking the second-highest annual performance since 2011, as reported by foreign investment monitor fDi Markets. In the past decade, apart from Mexico, no Central American or Caribbean nation has attracted as much FDI as the Dominican Republic. The country’s social stability, political stability, and economic stability have been key signals for investment, according to Biviana Riveiro, the director of the national investment and exports promotion agency ProDominicana.
Importantly, the investment landscape in the Dominican Republic has shown diversification. While the tourism sector historically received the majority of investments, it accounted for only half of total greenfield FDI since 2020. The renewable energy sector emerged as the second-largest recipient of FDI during this period, making up around 30% of the total FDI. The government has set ambitious targets for green energy, aiming for a quarter of the total power supply to be generated from renewable sources by 2025. Investment into logistics (8.4%) and manufacturing (5.2%) sectors also contributed to the diversified investment portfolio.
The country’s expanding production capacity is reflected in export figures. Exports of Dominican industrial goods, primarily manufactured in its 84 free zones across the nation, reached $10.8 billion in 2022, a 29% increase compared to pre-Covid levels in 2019 and a 40% increase over the past decade. This growth in exports underscores the nation’s economic resilience and diversification efforts.