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Dominican Republic and Puerto Rico Country Risk Report Q1 2019

Dominican Republic and Puerto Rico Country Risk Report Q1 2019

Real GDP growth will accelerate in the Dominican Republic, driven by the tourism sector and investment A newly minted diplomatic relationship with China offers upside growth potential through additional investment and foreign assistance

Corruption will remain a key issue in politics in the Dominican Republic over the coming quarters as the Marcha Verde protest movement galvanises the public However, it is unlikely that the movement turns to violence or directly challenges the authority of the current government

The Dominican Republic will run modest current account deficits in the coming quarters as rising import costs offset export growth That being said, foreign direct investment into the tourism and manufacturing sectors will support its external position

The Dominican peso will likely hold its value over the coming months after a modest depreciation in the year through Q318 Over the longer term, the Banco Central de la República Dominicana will continue a 'managed float' regime that allows for a moderate devaluation to support export competitiveness and to bolster foreign currency reserves

Key Risks Downside Risk: A downturn in the US economy would pose downside risks to our real GDP growth forecast for the Dominican Republic The country is highly leveraged towards the US with regard to tourist arrivals and demand for exports, and a significant slowdown could dampen headline economic activity


Brief Methodology
Indices – Brief Methodology
Dominican Republic – Executive Summary
Core Views
Key Risks
Dominican Republic – Country Risk Summary
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
External Trade And Investment Outlook
Robust Investment Will Boost Dominican Republic's External Position
Currency Forecast
DOP: Central Bank To Maintain Long-Term Depreciatory Trend
TABLE: CURRENCY FORECAST
10-Year Forecast
The Dominican Republic Economy To 2027
Robust Growth Ahead As Country Strengthens Export-Oriented Sectors
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Corruption A Key Concern In Dominican Politics
Long-Term Political Outlook
Business-Friendly Policies And Security Concerns Likely To Persist
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Dominican Republic And Puerto Rico Country Risk Q1 2019ContentsPuerto Rico – Executive Summary
Core Views
Major Forecast Changes
Key Risks
Puerto Rico – Country Risk Summary
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Growth To Fade In Puerto Rico As Federal Aid Falls
External Trade And Investment Outlook
Surge In Imports Will Narrow Puerto Rico's Current Account Surplus
10-Year Forecast
The Puerto Rican Economy To 2027
Fiscal Austerity, Demographics To Keep Growth Weak
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Puerto Rico Crib Sheet: Debt Negotiations, Hurricane Recovery In The Spotlight
Long-Term Political Outlook
Economic Weakness And Political Status The Main Challenges Ahead
Global Macro Outlook
Inflation And Policy Risks Rising
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: DOMINICAN REPUBLIC – MACROECONOMIC DATA AND FORECASTS
TABLE: PUERTO RICO – MACROECONOMIC DATA AND FORECASTS

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