Inflation has been dropping gradually in the Dominican Republic since mid-2022. The Central Bank reports the Consumer Price Index (CPI) in February was 0.11%. “The inter-annual inflation, that is to say, of the last twelve months, dropped 86 basis points from 7.24% in January 2023 to 6.38% in February of this year,” states a recent release from the Central Bank.
The financial and monetary authority says the monetary policy restrictions have worked. The Central Bank reports: “The institution considers it important to mention that the downward trend in inflation is mainly because inflationary dynamics continue to respond favorably to the combination of monetary policy measures adopted by the Central Bank and the government’s subsidies to fuel and the agricultural sector, together with the freezing of the electricity tariff. In addition, the prices of most commodities continue moderate compared to the levels recorded in previous months, and at the same time, global container shipping costs have decreased considerably.”
The Central Bank expects that for 2023 inflation will be 4% ±1%, as established in the country’s Monetary Program. The forecast is for the Dominican Republic to continue to be one of the fastest growing in the region.
A detailed analysis of the behavior of the general CPI shows that the group that contributed the most to the low inflation in February 2023 was Food and Non-Alcoholic Beverages, registering a negative variation rate of 0.44%. In addition, the result of -0.79 % of the index of the Communications group had an impact. Miscellaneous Goods and Services (0.80%), Restaurants and Hotels (0.86%) and Housing (0.30%) groups added to inflation.
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Central Bank
7 March 2023