The inflation is global, regional, but, above all, it is also Dominican. Of the 34 nations identified as the most advanced on the planet, in 15 there was inflation that exceeded 5.0%, in Europe registered 5.0%, in Latin America it reached 7.2%, that of the United States was 7.0% and in the Dominican Republic 8.5%, being
the largest in the region Central America and the Caribbean during 2021.
Dominican inflation as of February 2022 presents an accumulation of inflation of 2.11%, which is why its hectic course continues, as well as the same thing that happens to international inflation, which only at the level of food prices in the Food and Agriculture Organization of the United Nations (FAO), its index, places an accumulated increase of 5.18% for the months of January and February; while the price of WTI oil in international markets has grown from January to March 28 by 38.47%.
The behavior of international prices towards the rise reaches the formation} of the Dominican inflation. This is attested to by the variation in tradable prices, which during 2021 rose to 10.49% and in February 2022 registered 2.35%, the first 6.49 percentage points above the midpoint of the inflation target, which is 4.0% and In just the first two months of this year, it is on its way to the aforementioned midpoint.
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To Dominican inflation it is also reached by the increase in local prices (non-tradable goods) and is supported by the fact that in 2021 it exceeded the inflation target (4.0%), registering a value of 6.54, that is, 2.54 percentage points higher and so far in 2022 it stands at 1.87%.
The increase in prices in the Dominican economy is widespread, covering most of the goods and services that make up the basic basket, as well as extending over time in a sustained manner. 63.0% of inflation in 2021 was influenced by the group of food, transportation, housing and since October 2020 it began and has remained above the inflation target until then, going from 4.42% to 8.50% in December 2020. 2021 and in the first two months of 2022 it accumulates 2.11%.
In the latest reports on Dominican inflation, it is evident that the increase in prices behaves like a plague in the economy, since the quantity of goods and services of the basic basket is greater than its variation is in two digits. In the inflation of January 2022 there were 99 items and in February 113 that registered the aforementioned magnitudes, indicative of more contagion with price increases, characteristic of plagues when the purchasing power of wages decreases.
In its component of influence of monetary policy, national inflation finds evidence in the increase in prices, called underlying, because it does not include those goods and services with strong price or price volatility.
established by influence of administrative decisions. Core inflation in 2020 reached 4.77%, in 2021 6.87% and annualized to February 2022, it stands at 6.97%, all the referred relative values are above the midpoint of the inflation target and the last two by almost 3 percentage points.
As data that supports even more what was asserted in the previous paragraph is the Restricted Monetary Basewhich during 2021 exceeded the goal of the monetary program (8.8%) by 4.6 percentage points on an annualized basis, standing at 13.4% at the end of the year and in interannual February 2022, stands at 15.2%, compared to the anchor goal of 14.9% of the monetary program for the current year.
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The plague of rising domestic prices has spread throughout the Dominican territory. In the area of Great Saint Dominic, annualized inflation as of February 2022 is 7.87%, that of the North region by 10.0%, the East with 9.0% and that of the South by 10.1%, which is equivalent to saying that the general inflation in the entire geography stands at 8.98%, for 4.98 percentage points over the
inflation target.
One more example of the expansive power of the Dominican inflationary plague is that it also affects in greater proportion the population with the lowest income, which is located between quintiles 1 and 2 of the 5 population groups included in the price index of the basic basket of goods and services. The highest inflation is received by the
population of quintile 2 with 9.25% as of February 2022, followed by quintile 1 with 9.07%, followed by quintile 3 with 8.92%, followed by quintile 4 with 8.65% and, finally, quintile 5 with 8.64%.
The level and causes of the Dominican inflation rate are indicative that it is moving away from the price anchor and that the international environment with the problems of the supply chain and greater expectations of price increases, locates the action to combat against rising prices, mainly in the hands of the
Central Bank, helped by a prudent fiscal stance in the management of public spending, making it close to a fiscal balance that tends to balance in the present circumstance.
As has been read, the inflation is globalregional and is also in the Dominican Republic, behaving like a plague. It is characterized by being generalized and sustained, because it covers most of the goods and services of the basic basket, has lasted over time and is present throughout the national territory, with the aggravating circumstance of having a more intense impact on the sectors social with lower monetary income.
