Sovereign credit profile of the Dominican Republic: opportunities and challenges after the upgrade to Ba2

What it is about

William Foster, senior vice president of Moody’s Sovereign Risk Group, presented at the Third Annual Risk Conference (September 2025) the sovereign credit profile of the Dominican Republic after the upgrade of its rating to Ba2. The slides are in English.

The 26 slides explain what drove the upgrade from Ba3 to Ba2 with a stable outlook, the strengths and challenges of the credit profile (growth, institutions, fiscal position, debt affordability and event risk), which factors could lead to an upgrade or a downgrade and a comparison with regional peers and other Ba2 sovereigns.

Objectives

• Explain which factors led Moody’s to upgrade the Dominican sovereign rating to Ba2.
• Identify the country's main credit strengths and weaknesses.
• Show what the agency will monitor and how the country compares with its peers.

Key takeaways

1. The upgrade from Ba3 with a positive outlook to Ba2 stable reflects that the credit profile strengthened materially because of, among other factors, sustained high long-term growth.
2. Strengths include real GDP growth of 5% over 15 years, a record of political stability, low external vulnerability and a favorable debt maturity profile.
3. Institutions and governance have improved significantly, including relative to peers, and fiscal deficits have stabilized with a relatively lower debt burden.
4. The main challenge is that debt affordability is much weaker than that of peers, because of weak revenue collection, and a high share of debt is in foreign currency.
5. The rating could be downgraded if growth is sustainably weaker than expected or if fiscal prospects deteriorate materially.