Hector Valdez Albizu: Current Economic Analysis

The governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu , met with executives from the U.S.-based investment bank Morgan Stanley, to whom he offered an analysis of the current economic and monetary performance of the Dominican Republic.

In a press release, the entity highlighted that the governor detailed some economic outlooks, including: growth projections, progress made in regulation and macroprudential measures, inflation , the financial system and the external sector that the Central Bank contemplates for 2025.

The international corporation's executives, Raúl Gallegos, Emma Cerda, and Christopher Mejia, received an overview of the country's economic activity and employment from the governor , who expressed that the economy maintained a strong performance throughout 2024, with 5.0% growth , close to its potential and one of the highest in Latin America.

"In March, the economy expanded by 5.4% year-on-year, accumulating year-on-year growth of 2.7% during the January-March 2025 period. Looking ahead, once the uncertainties dissipate, the economy is expected to regain its dynamism, expanding by around 4.0% to 4.5%," the document states.

Regarding inflation , Valdez Albizu noted that it has remained within the target range of 4% ± 1% since the beginning of 2023, reaching 3.58% year-on-year in March 2025; while core inflation reached 4.24%, also close to the center of the target. He added that forecast models indicate that headline and core inflation will remain within the target range of 4% ± 1% during 2025 and 2026.

Likewise, among other relevant indicators on the performance and outlook of the Dominican economy , the governor expressed that "the BCRD has the necessary space to react with its monetary policy instruments to achieve the inflation target and help the economy return to a growth path close to its potential, once global uncertainty moderates and external conditions allow."

The details of financial regulations

Regarding the progress made in both financial regulations and the adoption of macroprudential measures, Valdez Albizu noted that, among other initiatives that have been implemented, the following have been carried out:

• Amendment to the Operational Risk Regulation under Pillar I of Basel.

• Amendment to the Regulations for the Protection of Users of Products and Services, which will help reduce fees and increase financial inclusion.

• The approval of the launch of Mark to Market as of January 1, 2026, which will entail the adaptation of regulations on liquidity risk and market risk.

The governor also provided a projection for the performance of the external sector in 2025, stating that "in total, the Dominican economy generated approximately $43.8 billion in foreign currency during 2024, and is projected to generate approximately $45.7 billion in foreign currency in 2025.

"Despite the uncertainty in the international environment, the current account deficit is projected to narrow to 3.0% of GDP by 2025, financed by foreign direct investment, which is expected to reach approximately $4.7 billion," the note highlights.

He also referred to international reserves , noting that they are above $15 billion, equivalent to nearly 12% of the gross domestic product (GDP) and about five months of imports. "These reserve levels represent around 90% of the new IMF metric, a value considered comfortable," he stated.

Valdez Albizu concluded by noting that the Dominican Republic is a country that can be relied upon due to its strong macroeconomic fundamentals and proven resilience to the various shocks it has faced in recent decades.

He also indicated that a well-diversified economic structure, legal security, and a positive business and social climate will allow the Dominican Republic to remain a safe and profitable destination for international investors .

During the meeting , the governor was accompanied by Joel Tejeda, Deputy Manager of Monetary, Exchange, and Financial Policies; Julio Andújar, Economic Advisor to the Governor's Office; Joel González, Deputy Manager of Monetary Programming; and Ramón González, Deputy Manager of National Accounts.

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