S&P Global Ratings on May 3 affirmed its long- and short-termsovereign credit ratings on the Dominican Republic at BB- and B, respectively, witha stable outlook.
The country's transfer and convertibility assessment remainsunchanged at BB+.
The ratings reflect the Dominican Republic's relatively diversifiedeconomy, which has sustained economic growth above its peers, as well as its fairlystable external debt and liquidity indicators. The country's monetary policy hasalso gained more flexibility, particularly since 2012, though it is still constrainedby Banco Central de la República Dominicana'squasi-deficit and the low level of domestic credit, according to the rating agency.
Various institutional weaknesses and a still-evolving systemof checks and balances that have not consistently supported policy predictabilityacross administrations constrain the ratings, S&P said, adding that it expectsthe government's debt burden to trend higher and become more costly.
S&P forecasts real GDP to grow 5% in 2016 to 2018, followinggrowth of 7.3% in 2014 and 7% in 2015, and expects tourism, mining, construction,and remittances from the U.S. to drive growth.
"We do not see the greater opening of the Cuban market toAmerican arrivals significantly hurting the Dominican Republic's tourism offeringover the next three to four years," the rating agency said.
The Dominican Republic is scheduled to hold presidential electionsMay 15.
S&P Global Ratingsand Global Market Intelligence are owned by S&P Global Inc.