🇩🇴 The Dominican Investment Record
Who and what is fueling the record flow of money into the island?
Welcome to Latinometrics. We bring you Latin American insights and trends through concise, thought-provoking data visualizations.
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🏦 Foreign Investment
The Dominican Republic (DR) is the third smallest country in Latin America in terms of land mass, with just roughly 11M inhabitants. In fact, you could fit 175 DRs into Brazil's land mass.
The country has a relatively diversified export economy worth $13B in 2023, with main exports including electrical equipment, medical instruments, and tobacco. However, the real power lies in services, which made up 57% of its economy last year, with tourism being particularly impressive.
Our partner for this story, Banco Popular Dominicano, is the DR’s largest private bank and a pivotal player in the country’s economic success in its 60 years of operation. Known locally as #BancoDelTurismo, Banco Popular Dominicano is the leading lender in the tourism sector, supporting both local businesses and foreign investors in harnessing the opportunities that the Dominican Republic offers.
The country emerged as a post-pandemic global leader, attracting 7.1M visitors in 2022, and 8M last year. In that period, it welcomed 60% more tourists than Brazil, the region’s largest country by population and size. So, the third smallest is also the second-most visited Latin American country, behind only Mexico.
Just like it attracts tourists, this tropical paradise has no trouble attracting investors, as evidenced by its two consecutive record years of foreign direct investment (FDI).
Political stability is a significant factor in Latin America when it comes to attracting foreign capital. Without a doubt, this has been a key contributor to the Dominican Republic’s strong economic growth.
So where is the money coming from? We show you that and where it's going, thanks to data from the country’s central bank.
The US accounted for 30% of last year's investment, followed by Spain's $670M, or 15%. Tourism remains the most exciting prospect for foreign money, but energy has been rapidly taking center stage — the $1.07B from 2023 is almost 3x the average of the past five years. The $110M solar energy park of Monte Plata, the largest of its kind in the Caribbean at the time, is a prime example of the island country’s renewable energy projects.
Indeed, these are exciting times for the Dominican Republic. Foreign investors are lining up to get in on the country’s action, and we see why: per a growth forecast by the International Monetary Fund, the DR will grow by 5.4% this year, well ahead of its regional peers.
And who knows? When we publish on this topic in 5 years maybe it’ll be the financial sector, spearheaded in part by Banco Popular Dominicano, at the top of Foreign Direct Investment.
Comment of the Week 🗣️
Pepe’s comment makes us think about the inefficiencies of gas production in Mexico. From our chart about gas affordability.
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