The Central Bank of the Dominican Republic (BCRD) reported that the consumer price index (IPC) increased 0.28% in October 2022, registering three consecutive months below the 0.30% threshold and placing the accumulated inflation of first 10 months of 2022 at 6.31%.
Regarding year-on-year inflation, which is the measure from October 2021 to October 2022, the BCRD explained that 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 inflation would be around 7% at the end of 2022. The monthly report on the behavior of the CPI says that this downward trend in inflation makes it possible to project that 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 BCRD to mitigate price growth, “which shows that the monetary policy transmission mechanism is operating. Similarly, the subsidies implemented by the Government for fuels, the pause in electricity rate adjustments, as well as initiatives to reduce production costs in agriculture, have had an impact,” he stressed.
When evaluating the monthly result of core inflation, he said that it begins to slow down notably in the month of October 2022, showing a variation of 0.36%, the lowest registered 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, which reflects that this variable is reacting as expected. It highlights that this indicator isolates the behavior of certain foods with great variability in their prices, as well as fuels, services with regulated prices such as the electricity rate, transport and alcoholic beverages and tobacco, with the aim of extracting clearer signals for the conduct of monetary policy. He explained that when analyzing the CPI for the month of October, it stands out that the groups with the greatest contribution were Miscellaneous Goods and Services, growing 0.90%, Food and Non-Alcoholic Beverages (0.29%), Restaurants and Hotels (0.46%), Transportation (0.17 %), Housing (0.20%) and Furniture and Household Items (0.41%). The CPI of the Miscellaneous Goods and Services group, the one with the highest incidence on the result of the general CPI, grew 0.90%, mainly due to price increases registered in health insurance, personal care services (in personal care items (0.79 %) and in holding events (3.56%).
