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We estimate that the Dominican Republic experienced a growth rate of 5.0% in 2024, driven by a tight labour market and strong income growth. We remain optimistic about Dominican growth for 2025, forecasting real GDP growth of 4.7%. A low inflation environment will support aggregate household income growth, though overall growth will be constrained by the country's continued reliance on the US economy. This strong growth has kept President Luis Abinader of the Partido Revolucionario Moderno (PRM) popular, with a net approval rating of 16.6% as of January 15, 2025. Additionally, we forecast that the fiscal deficit will remain stable, from an estimated 3.1% of GDP in 2024 to 3.2% in 2025, primarily due to spending cuts. While not directly impacted by the shift in US trade policy announced on April 2, it is worth noting that the tourism sector accounts for around 15% of Dominican GDP and 30% of visitors come from the US. Similarly, remittances - largely flowing from the US - total just shy of 10% of GDP.Editor's note: Updated on April 3.