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Fitch Affirms Dominican Republic at 'BB-'; Outlook Stable
20 SEP 2018 12:00 PM ET
Fitch Ratings-New York-20 September 2018: Fitch Ratings has affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook.
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
The ratings balance Dominican Republic's favorable macroeconomic performance and narrow current account deficit with its weak public finances, higher net external debt than 'BB' peers, limited monetary policy effectiveness, and lower governance and social indicators than 'BB' peers.
Fitch expects the economy to return to above-potential growth of 5.8% in 2018 (after dipping to 4.6% in 2017) and to average 5.2% in 2019-2020, driven by investment, tourism and remittances. Inflation is moderate within the central bank's 4%+/-1% target band at 3.87% yoy in August, up moderately from 3.3% on average during 2017 as a result of higher fuel import prices. Fitch expects the current account deficit (CAD) to remain below 2% of GDP and financed by net FDI over 2018-2020.
20 SEP 2018 12:00 PM ET
Fitch Ratings-New York-20 September 2018: Fitch Ratings has affirmed Dominican Republic's Long-Term, Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook.
A full list of rating actions is at the end of this rating action commentary.
KEY RATING DRIVERS
The ratings balance Dominican Republic's favorable macroeconomic performance and narrow current account deficit with its weak public finances, higher net external debt than 'BB' peers, limited monetary policy effectiveness, and lower governance and social indicators than 'BB' peers.
Fitch expects the economy to return to above-potential growth of 5.8% in 2018 (after dipping to 4.6% in 2017) and to average 5.2% in 2019-2020, driven by investment, tourism and remittances. Inflation is moderate within the central bank's 4%+/-1% target band at 3.87% yoy in August, up moderately from 3.3% on average during 2017 as a result of higher fuel import prices. Fitch expects the current account deficit (CAD) to remain below 2% of GDP and financed by net FDI over 2018-2020.