Moody’s Upgrades Dominican Republic’s Credit Rating to Ba2

New York City, USA — Moody's Ratings announced yesterday that it has upgraded the Dominican Republic‘s sovereign rating from Ba3 to Ba2 for both local and foreign currency debt. This boost reflects the country’s solid economic performance and institutional improvements.

The agency stated that the outlook for the country has been changed from positive to stable. This decision was made during a Rating Committee meeting on August 1, 2025, where Dominican economic fundamentals were evaluated positively. Moody’s noted there have been no significant negative shifts, but rather an improvement in governance.

Moody’s pointed out that the Ba2 rating is indicative of strong GDP growth, which has averaged nearly 5% annually over the last 15 years. Additionally, the increase in per capita income is attributed to macroeconomic stability and growth in crucial sectors like tourism, which have drawn considerable investment.

Moreover, the agency commended the institutional strengthening observed since 2020, including constitutional, administrative, and fiscal reforms. These changes have led to a more transparent legal framework for managing public spending and budget deficits.

In its report, Moody’s acknowledged the Dominican Republic’s political and social cohesion, which it claims is better than that of other countries with similar ratings in the region. Despite the upgrade, structural fiscal constraints such as low tax pressure (at 16% of GDP) and reliance on foreign currency debt pose challenges.

Moody’s reported that in 2024, debt service took up 21% of public revenues, with 66% of the debt in foreign currency. The agency forecasts a fiscal deficit of around 3.2% of GDP in 2025, stabilizing public debt at about 48% of GDP. Moody’s emphasized that without broad tax reforms, fiscal limitations will hinder the country’s payment capabilities. However, there is potential for an improved rating with elevated tax revenue.