ISTANBUL

The Dominican Republic's real gross domestic product (GDP) growth is projected around its long-term trend of 5% in 2024 and thereafter, with inflation around its 4% target, the International Monetary Fund (IMF) said Wednesday.

Despite a strong economic recovery after the coronavirus pandemic, the Caribbean country saw its growth slow to 2.4 % in 2023 due to tighter global and domestic financial conditions, weak export demand and domestic factors largely climate-related, it said.

"The growth slowdown, alongside lower commodity prices, drove inflation’s faster-than-expected convergence to its target range by May 2023," the IMF said in its Staff Concluding Statement of the 2024 Article IV Mission.

"In response, the BCRD (Banco Central de la República Dominicana) cautiously and appropriately reduced its key policy rate, allowing for greater exchange rate flexibility, while fiscal policy was prudently adjusted—increasing public investment—to support the economy," it added.

The financial agency noted that the current account deficit narrowed to 3.6% of GDP last year, driven by falling commodity prices and record travel income, while it was fully financed by foreign direct investment (FDI) flows.

The current account deficit, expected to be fully financed by FDI, is projected to gradually narrow to less than 3% of GDP in the medium-term supported by a lower energy bill, and higher tourism and incomes from free trade zones, according to the IMF.