While the DR’s economic growth is expected to exceed that of most other Caribbean countries in 2025, systemic challenges persist.  Rising food and energy costs,  make it increasingly difficult for low-income households to afford the basic food basket. The impacts of environmental degradation, such as mangrove, beach and coral reef erosion, as well as pollution, threaten long term critical resources for tourism, which is a major economic driver.

A record 11.2 million tourists visited the DR in 2024, including 2.66 million by cruise ship. With such a heavy dependence on tourism, especially U.S. tourists, the DR faces challenges in developing other sectors of its economy.  

The DR’s per capita GDP of $11,692 in 2024 masks a very uneven distribution of wealth, heavily in favor of the upper classes. Around 20.8 percent of the population lives below the poverty line. While access to schooling in the Dominican Republic has improved markedly, educational outcomes remain significantly below those of many peers in Latin America.  Public spending has been disproportionately funneled into public works and the electricity sector at the expense of other social programs, such as education and healthcare. The DR’s weak performance in these global rankings, in terms of both the quality of its public education and time spent in school, has prompted education reforms. While progress has been made, significant challenges persist.  Despite close ties with the United States, only an estimated 5-10% of the population speak some level of English.  

The DR is a net importer of oil and price volatility has a significant impact on the local economy. Additionally, electricity subsidies continue to burden fiscal accounts, making the energy sector a drag on public finances. Compounding the problem is the inability of the state-owned electric power distribution companies to collect payment on roughly 35 percent of the electricity they supply – either through technical losses or non-payment of bills and/or theft by individuals and companies. The accumulation of debts owed to power generators results in a lack of working capital, disruptions in fuel supplies, and frequent blackouts across the country.

International indicators of the DR’s competitiveness and transparency indicate significant issues. Foreign investors cite a lack of clear, standardized rules by which to compete and a lack of enforcement of existing rules, particularly in public procurement. Complaints include allegations of widespread corruption, requests for bribes, delays in government payments, weak intellectual property rights enforcement, bureaucratic hurdles, slow and sometimes biased judicial processes, non-standard procedures in customs valuation of imported goods, as well as product misclassification as a means of negating CAFTA-DR benefits and increasing customs revenues. Weak land tenure laws and government expropriations continue to be a problem.

The lack of transparency and corruption continue to earn the DR low scores in international comparison tables. In Transparency International’s 2024 Global Corruption Perception Index, the DR improved one place to 104 out of 180, with a score of 36, still among the lowest in Latin America and far behind most of its Caribbean neighbors.

There is also a lack of institutional continuity across changes in government administrations. The wholesale turnover in government personnel that typically occurs with changes in administrations can result in loss of records, which in turn can result in payment disputes and rejection of bills for goods and services purchased by preceding administrations. Multiple U.S. Government agencies are assisting the DR government (GODR) with programs to professionalize its procurement workforce and improve enforcement of existing procurement law.