U.S. and DR to explore collaboration on extraction of rare-earth elements
Official data confirmed strong economic growth in 2024, with a 5% annual expansion, and lower unemployment amid rising labor force participation. Preliminary estimates indicate a 3% of GDP current account deficit, and an increase in NFPS debt, to 46.1% of GDP.
The new year began with moderate monthly inflation (0.37%) and a 4.7% y/y DOP depreciation, less than in previous months. However, depreciation has been increasing since late November 2024. Despite the strong y/y performance of exports and remittances, and moderate growth of goods imports in January 2025, net international reserves recorded a monthly decline of $0.8 billion, to $12.6 billion.
Despite moderate monetary easing in January 2025 — reflected in the reduction of the monetary policy rate and the moderate growth of the broad monetary base and money supply compared to previous months — the lending rate increased again in January, after declining in December 2024. Credit to the private sector in local currency terms grew at its lowest rate since July 2021 (9.7% y/y).
Fiscal accounts remained weak, with tax revenues falling 9.8% y/y in January 2025, while expenditures increased by 9%.
U.S. Secretary of State Marco Rubio’s early February visit brought key developments. The United States reaffirmed its support for the multinational security support mission in Haiti, and assured that it would not pressure the Dominican Republic to accept uncontrolled migration. The biggest surprise was the revelation of significant though still unproven reserves of rare-earth elements, along with plans to explore potential U.S.-Dominican collaboration to exploit them. The Dominican government also reaffirmed its commitment to cooperating with the United States to combat drug trafficking.
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