Dominican Republic’s Rating Upgraded to BB+ by Fitch

Santo Domingo.- Fitch Ratings recently upgraded the Dominican Republic’s outlook from “BB-stable” to “BB-positive,” recognizing significant institutional advances and a consistent track record of solid economic growth.

The credit rating agency highlighted the Dominican government’s efforts to strengthen governance, including greater budget transparency, improvements in internal audits, improvements in the judicial system and political stability. Economically, Fitch praised the Dominican Republic’s diverse export structure, its solid record of economic growth, and its high social indicators compared to its peers.

The Ministry of Finance attributed this positive change to the institutional improvements made during the administration of President Luis Abinader and the effective economic management by the fiscal and monetary authorities. Abinader’s administration has shown notable progress in Global Governance Indicators, particularly in the control of corruption, government effectiveness, and the rule of law. The country has steadily improved in these areas, moving from the 42nd percentile in 2018 to the 51st in 2022.

The Minister of Finance, Jochi Vicente, highlighted the government’s continuous administrative improvements and stated that each step forward in the credit rating brings the country closer to greater social development. Vicente expressed the government’s commitment to elevating the Dominican economy to Investment Grade status, despite several challenges.

Fitch Ratings projects that the Dominican Republic’s economy will return to its 5% growth potential in 2024-2025, driven by economic stimuli and strong foreign direct investment. The organization also highlighted the issuance of an external bond denominated in pesos last September, which contributed to reducing the proportion of foreign currencies in the public debt portfolio to 68%. The increase in emissions from the domestic market has complemented this improvement.

The Vice Minister of Public Credit María José Martínez highlighted that Fitch Ratings’ growth projections for the coming years could position the Dominican Republic above nations and states in the region with a BBB rating, approaching Investment Grade.

In addition, Fitch Ratings recognized the country’s effective management of inflation, which allowed the Central Bank to reduce its monetary policy rate by 125 basis points, from 8.50% to 7.25%. This upgrade from Fitch Ratings follows Moody’s upgrade of the Dominican Republic’s outlook in August, from Ba3 stable to Ba3 positive, citing efficient and proactive management of public debt by the current government.

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