Moody’s improves Dominican Republic’s credit outlook and reaffirms the sustainability of the Government’s public debt

The Ministry of Finance highlighted that this improvement moves the country one step closer to reaching its goal of becoming Investment Grade.

Santo Domingo.- Moody’s credit rating agency, announced this Thursday its improvement of the Dominican Republic’s credit outlook from Ba3 stable to Ba3 positive, recognizing, among other factors, the efficient and proactive debt management of the current administration led by President Luis Abinader.

Fiscal policy effectiveness, improvement in revenues, continued economic strength, driven by gross domestic product (GDP) growth along with the country’s proven resilience to external shocks, were the main other factors that motivated the positive change in the country’s outlook, according to the report published by the renowned firm.

“Overall government effectiveness has improved in recent years contributing to the country’s strong recovery from the pandemic, improved fiscal performance and declining inflation.”, according to the report.

Jochi Viecente, Minister of Finance, expressed that this improvement in the country's outlook is a result of the efforts and the strong commitment the Ministry’s team has shown in working towards reducing debt levels as well as guaranteeing its sustainability.

“In addition to the liability management operations we carried out and the reduction in debt service achieved, we have also reduced financing needs, as a result of the discipline with which we manage public finances,” stated Vicente.

Moody’s report highlights that non-financial public sector debt showed a significant improvement from nearly 46% at year-end 2022 when compared to about 57% at the end of 2020.

Vice Minister of Public Credit, María José Martínez, commenting on the improved outlook emphasized that "the move to positive in the country's risk outlook is a result of the improvements in governance, institutionality and debt management that we have implemented, leading us one step closer to our goal of reaching Investment Grade.”

At the end of last year, the Government reached a milestone obtaining a “BB” credit rating by Standards & Poor’s (S&P) for the first time in history. This was also the first increase in the country’s rating by S&P since 2015.

Like Mood’s, S&P also underlined the improvement in the administration of public institutions, the country’s ability to consistently demonstrate high economic growth rates, and the improvements in fiscal planning and public debt management.