Dominican Republic Edges Closer to Investment Grade

By Guzmán Ariza, Attorneys at Law

The Dominican Republic is advancing toward achieving investment-grade status, driven by over a decade of consistent economic growth, macroeconomic stability, and proactive policymaking. President Luis Abinader has openly stated his ambition for the country to reach investment-grade classification before the end of his second term in 2028. His administration has prioritized transparency, infrastructure, and fiscal discipline as pillars of investor confidence.

According to a recent article by Bloomberg Línea, the country’s sovereign bonds are already performing on par with those from investment-grade peers. The yield spread between Dominican bonds and U.S. Treasuries has narrowed to around 2.34 percentage points—below the average for similarly rated countries and nearly in line with investment-grade economies. This performance reflects strong investor confidence in the Dominican economy despite its current BB rating from S&P and BB- from Fitch.

The Central Bank of the Dominican Republic has also highlighted key macroeconomic milestones. Since 2012, the country has posted an average annual growth rate of about 5%, supported by a well-anchored inflation-targeting regime. Inflation remains within the 4% target range, while international reserves have reached historic highs—around USD 15.3 billion, equivalent to nearly 13% of GDP. In the first half of 2024 alone, the country attracted over US$2.3 billion in foreign direct investment (FDI), with expectations to close the year near USD 4.8 billion.

These indicators are not going unnoticed. Moody’s changed its outlook for the Dominican Republic from “stable” to “positive,” citing improved macro fundamentals and external buffers. The country’s EMBI (Emerging Markets Bond Index) risk spread has also dipped below that of several Latin American countries with actual investment-grade ratings, such as Mexico, Colombia, and Panama.

Beyond macroeconomic figures, the Dominican government has been pushing forward strategic reforms to diversify the economy and bolster its institutional framework. Among the priorities is the development of a national semiconductor strategy, mining transparency initiatives aligned with EITI standards, and continued investment in energy and transport infrastructure. The Ministry of Foreign Affairs (MIREX) recently emphasized these efforts as part of a broader campaign to position the country as a hub for nearshoring and advanced manufacturing.