In brief

The Dominican Republic is gearing up for its next general election, on May 19th. Based on opinion polls and the results of the municipal elections in February, we believe that the president, Luis Abinader of the centrist Partido Revolucionario Moderno (PRM), is likely to win outright in the first ballot (by winning more than 50% of the vote). However, there are downside risks, as economic challenges and a potential spillover of the violence in neighbouring Haiti into the Dominican Republic could erode some public support. Mr Abinader has hardened his stance on Haiti since its prime minister resigned in mid-March, leaving a power vacuum there. We expect the border to remain partially closed (the status quo since October) until mid-2024, but if the situation worsens, the full reopening of the border could be delayed, keeping exports subdued and posing downside risks to our GDP growth forecasts. 

Assuming that Mr Abinader wins re-election and that the PRM maintains its majority in both houses of Congress, the president's pro-market agenda will continue in 2024-28. We expect growth to pick up in 2024 as the positive impact of lower interest rates becomes more apparent. Inflationary pressures will remain muted, but the country's dependence on imported oil exposes consumer prices to swings in international oil prices.