What the World Bank said about the Dominican Republic Economy | by KASH
Dominican financial sector shows strong solvency
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Santo Domingo.- The Dominican Republic's financial sector is currently experiencing a substantial influx of capital, as reflected in Central Bank records. As of March 2024, the regulatory solvency index for financial institutions reached an impressive 17.6%, far exceeding the minimum 10% requirement mandated by the Monetary and Financial Law.
This surplus translates to RD$174,952 million in excess assets within the Dominican Republic's financial system, showcasing its robust financial health. Recent stress tests conducted by the Central Bank further validate the system's resilience, indicating that even in scenarios of lower-than-expected economic growth, regulatory solvency would remain well above the 10% threshold.
The strength of the financial system is largely due to the high quality of its credit portfolio, evidenced by a low delinquency rate of just 1.3% (1.2% within the multiple banking subsector). Between June 2023 and June 2024, the financial system saw net growth of approximately RD$297,000 million, or 17.4%, all while maintaining provisions of RD$2.4 for every RD$1 of overdue loans.
This data underscores the fact that both productive sectors and households are reliably meeting their financial obligations. The financial system’s substantial reserves to cover potential credit losses further highlight the resilience and stability of the sector. With such a strong financial foundation, now is an ideal time to invest in the Dominican Republic, as the country continues to demonstrate its capacity for sustainable economic growth.
The World Bank recently highlighted the Dominican Republic's strong economic performance and the positive impact of its strategic initiatives. According to the World Bank, the Dominican Republic has been a standout in the Caribbean region, particularly in terms of economic growth and resilience. The country has implemented significant institutional reforms that have contributed to sustainable development, climate resilience, and better protection of natural resources. These efforts are supported by a $400 million World Bank project, aimed at enhancing the Dominican Republic's capacity to manage environmental risks and improve public health and livelihoods, especially in sectors like tourism and fishing.
Additionally, the World Bank has assisted the Dominican Republic in developing its first-ever regional GDP data, which provides a detailed breakdown of economic activity across the country’s regions. This data is crucial for informed policymaking and helps to identify the most dynamic areas contributing to national growth, while also addressing regional disparities.
Overall, the World Bank commends the Dominican Republic for its robust growth, sound economic policies, and progress towards sustainable development goals.
For more details, you can read the full reports [here](https://blogs.worldbank.org/en/openda...) and [here](https://www.worldbank.org/en/news/pre....
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