The Dominican Republic has the second largest economy (the largest, according to the U.S. State Department) in Central America and the Caribbean. It is an upper middle-income developing country, with a 2007 GDP per capita of $9,208, in PPP terms, which is relatively high in Latin America. In the trimester of January–March 2007 it experienced an exceptional growth of 9.1% in its GDP, which was actually below the previous year's 10.9% in the same period. Growth was led by imports, followed by exports, with finance and foreign investment the next largest factors.
The Dominican Republic is primarily dependent on natural resources and government services. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place, behind mining, in terms of export earnings. The service sector in general has experienced growth in recent years, as has construction. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Real estate tourism alone accounted for $1.5 billion in earnings for 2007. Remittances from Dominicans living abroad amounted to nearly $3.2 billion in 2007.
Economic growth takes place in spite of a chronic energy shortage, which causes frequent blackouts and very high prices. Despite a widening merchandise trade deficit, tourism earnings and remittances have helped build foreign exchange reserves. The Dominican Republic is current on foreign private debt.
Following economic turmoil in the late 1980s and 1990, during which the gross domestic product (GDP) fell by up to 5% and consumer price inflation reached an unprecedented 100%, the Dominican Republic entered a period of growth and declining inflation until 2002, after which the economy entered a recession.
This recession followed the collapse of the second-largest