The credit rating agency Standard & Poor’s (S & P Global) reported that the credit outlook for the Dominican Republic rose from negative to stable due to an impressive economic recovery that has reversed the external deterioration caused by COVID-19.
Standard & Poor’s highlights in its December 2 report that this improvement is a sign of the dynamism of the Dominican economy, compared to its peers with similar levels of development.
In addition, it points out that the evolution of the tourism sector is going much faster than expected, which is supported by the strong vaccination campaign against COVID-19. This progress is evidenced by the growth in visitor arrivals to the country, which already exceed the levels registered in 2019.
The agency estimates favorable economic growth and the continuity of public policies for the next 12 to 18 months. In this way, the base scenario that the rating agency manages for next year is that the gross domestic product (GDP) grows by 6% and around 5% for the following years, driven by investment from the private sector.
“This great news shows the effort that has been made for prudent fiscal management, keeping the focus on improving the quality of life of Dominicans,” said the Minister of Finance, Jochi Vicente.
Another factor behind Standard & Poor’s decision to improve the outlook for credit risk is the solid fiscal consolidation achieved by the Dominican government in 2021, after the sharp increase in the fiscal deficit and debt levels last year.
Regarding debt management, the rating firm highlights the liability management operations, both in the local and foreign markets, for a total of $ 2.4 billion with maturities between 2021 and 2027.