The Dominican Republic bounced back in 2005, with the economy expanding briskly and inflation ending the year in single digits. According to the central bank, GDP growth was estimated at 7%, up from 2% the year before, while 12-month average inflation was forecast at 8% by year-end.
Things went from bad to worse in 2003 and 2004, after first a major banking crisis and then the mishandling of the aftermath by the government of then president Hipólito Mejía. Because of that, the economy went into a tailspin, with the exchange rate going into freefall, inflation soaring and debt ballooning.
