Santo Domingo – The Ministry of Economy, Planning, and Development (MEPyD) has released its latest “Sectoral Outlook – May 2025” report, providing an in-depth analysis of the Dominican Republic’s key economic sectors over the first five months of the year. The findings highlight a mixed performance across industries, with strong growth in agriculture and domestic manufacturing, contrasted by declines in commerce, free trade zones, and tourism.
Agriculture Surges on Export Boom
Agricultural exports totaled US$557.3 million, marking a 32.4% year-on-year increase. The surge was largely driven by higher shipments of cacao, bananas, and avocados to key markets such as the United States, Belgium, and the United Kingdom. Despite the export boost, agricultural prices fell slightly by 0.7% in May, while prices in the livestock sector remained stable.
According to the FAO, food inflation for June is projected at 4.3%, with no signs of abnormal price spikes.
Local Manufacturing Gains, Free Trade Zones Decline
The manufacturing sector showed a divergent performance. Local manufacturing exports rose 13.8%, led by strong demand for steel bars and hydraulic cement. However, free trade zone exports fell 2.1%, attributed to decreased sales of jewelry and electrical switches.
The Producer Price Index (PPI) posted a 1.0% cumulative increase, while real manufacturing demand edged up by just 0.2%, indicating modest domestic momentum.
In the construction sector, the cost of residential construction rose 3.7%, driven by higher prices for basic materials. Though annual imports of construction inputs rose 4.0%, they saw a 7.2% year-on-year drop in May, pointing to short-term adjustments in the industry.
Commerce and Services Under Pressure
The services sector presented a mixed outlook. Commerce experienced a sharp 15.3% year-on-year drop in May, though it maintains a cumulative growth of 3.8% for the year.
Land transport showed positive movement, with a 6.6% increase in cargo and a 5.5% rise in passenger traffic, despite the general operations index declining 9.3% year-on-year.
Tourism remained a partial bright spot. As of May 24, 433,400 non-resident foreigners visited the country, primarily from the U.S. and Canada. Hotel occupancy improved by 1.6 percentage points, with notable growth in tourism hubs such as La Romana–Bayahíbe and Samaná.
Credit Growth Uneven Across Sectors
Credit to the productive sector increased 3.8% year-on-year, with electricity, construction, and transport sectors seeing the most growth. However, loans to agriculture (-6.8%) and manufacturing (-8.1%) declined, potentially limiting future expansion in these key areas.
On a more positive note, microenterprise credit jumped 10.7%, while loans for housing and consumption rose by 11.1% and 6.2%, respectively.
The report notes that the total private credit balance stood at RD$1.71 trillion, distributed as follows: 48.2% to the productive sector, 28.1% to consumption, 20.2% to housing, and 3.5% to microenterprises.
Outlook
The mixed economic signals point to a period of transition and adjustment. While agriculture and manufacturing continue to drive growth, contractions in commerce, tourism, and industrial exports highlight structural challenges that will require targeted policy responses in the months ahead.
