The central bank of the Dominican Republic (BCRD) reports that the consumer’s price index (CPI) reflected a variation of 0.28% in October 2022, locating the accumulated inflation January-October 2022 in 6.31%.
According to the regulatory entity, the inflation is registering three consecutive months below the threshold of 0.30 percent.
Refering to inflation interannual, measured from October 2021 to October 2022, it maintains a downward trajectory, standing at 8.24% in October, “a drop of 140 basis points compared to the peak of 9.64% observed in April of this year, so it is forecast that the inflation would be around 7% at the end of 2022”.
According to the downward trend described above, the central bank projects that the inflation would be converging towards the target range of 4% ± 1% before the end of the second quarter of next year 2023, “as a result of the effectiveness of the timely measures adopted by the central bank to mitigate price growth, which shows that the monetary policy transmission mechanism is operating”.
Adds the BCRD in a report that they have influenced the subsidies implemented by the Government to fuels, the pause to the electricity tariff adjustmentsas well as initiatives to mitigate the costs of production in agriculture.
“When evaluating the monthly result of the inflation underlying, it begins to slow down notably in the month of October 2022, showing a variation of 0.36%, the lowest recorded in the last 22 months. In year-on-year terms, it stood at 6.86%, below the 7% threshold observed during all the months of 2022, reflecting that this variable is reacting as expected.”
Inflation goods and services
By analyzing the consumer’s price index of the month of October 2022, it stands out that the groups with the highest contribution were miscellaneous goods and services when growing 0.90%, food and non-alcoholic beverages (0.29%), restaurants and hotels (0.46%), transportation (0.17%), living place (0.20%) and furniture and household items (0.41%).
The CPI for the group of miscellaneous goods and services, the one with the greatest impact on the result of the general CPI, grew 0.90%, mainly due to the price increases registered in health insurance (5.75%), personal care services (0.75%), in personal care items (0.79%) and in holding events (3.56%).
The results of consumer’s price index by geographical regions show that the Ozama regionwhich includes the National District and the province of Santo Domingo varied 0.19%, the North region 0.36%, the East region 0.42% and the South region 0.25%. “The greatest variation registered in the IPC of the East region It is explained, basically, by the higher incidence of the food and non-alcoholic beverages group in that geographical area”.
The index of the food and non-alcoholic beverages group registered a “moderate” variation of 0.29%, mainly explained by the price increases observed in green bananas (3.83%), green pigeon peas (8.78%), tomatoes (10.59%), chili peppers (5.63%), sweet potatoes (7.53%), yautia (7.28%), ripe plantains (3.47%), pork (0.91%), soft drinks (0.77%), potatoes (2.54%) and chicken broth (1.09%). ), while other food goods saw price declines such as fresh chicken (-2.82%), avocados (-5.14%), eggs (-1.01%) and garlic (-4.16%).
“It is important to highlight that the high incidence of the negative variation in the price of chicken contributed to a minor inflation of the CPI of the food and non-alcoholic beverages group in the month of October 2022”, says the BCRD in its report.
Inflation by quintile groups
The behavior of the price index by socioeconomic strata shows that the quintiles with the lowest income registered variations of 0.36% in quintiles 1 and 2, 0.32% in quintile 3, mainly due to increases in the price indices of the food group and non-alcoholic beverages, land transport services and the miscellaneous goods and services group. As for the quintiles with the highest income (4 and 5), they showed rates of inflation of 0.32% and 0.22% respectively.
