Report by the Dominican Republic

One year after its previous Trade Policy Review in 2002, the Dominican Republic suffered one of the most serious economic and financial crises of its history following the bankruptcy of three banks owing to a combination of fraud, excessive loans to related parties, and poor management of public finances. This crisis led to high inflation, a sharp depreciation in the exchange rate, capital flight, a twofold increase in the public debt in the space of a single year, and a slowdown in the country’s economic growth. The Government’s commitment to drawing up and implementing an economic programme aimed at re-establishing fiscal, monetary and financial discipline and to introducing structural reforms in a number of areas contributed to a marked and rapid recovery of the economy and of international reserves, and hence lower inflation and interest rates, a more stable exchange rate, and the recovery and consolidation of economic growth.