The Central Bank of the Dominican Republic (BCRD) reported that the consumer price index (IPC) registered an increase of 1.18% compared to December 2021, while year-on-year inflation, measured from January 2021 to January 2022, it was placed at 8.73%.
The report released by the BCRD explains that inflationary pressures have been more persistent than expected, for which the Monetary Board through the Open Market Operations Committee (COMA) authorized the BCRD to increase the monetary policy rate by 200 basis points to place it at 5.0% per year.
Likewise, he explained that in line with this signal of a change in the monetary policy stance, bill and note auctions have been carried out that have managed to substantially reduce the monetary mass in circulation and have contributed to generating an exchange appreciation in recent weeks. These measures will facilitate the gradual convergence of inflation to the target range of 4% ± 1% over the monetary policy horizon.
segregated inflation
In this vein, it indicates that underlying inflation isolates the behavior of certain foods with great variability in their prices, as well as fuels, services such as electricity rates and transportation, in addition to alcoholic beverages and tobacco, thus allowing the extraction of clearer signals for the conduct of monetary policy.
The governing body of monetary policy highlights that price dynamics continue to be affected by external shocks.
In particular, the price of a barrel of intermediate oil from Texas (WTI) continued to increase its price, going from an average of US$71 in December 2021 to an average of US$83 during January 2022, conditioned by production limitations. world crude oil and geopolitical tensions in some producing countries.
Likewise, other important raw materials for local production such as soybeans, corn and wheat, registered new increases during the month of January 2022 of the order of 9.40%, 4.57% and 1.29%, respectively. Likewise, the high cost of container transport remains, which affects the prices of imported goods.
Groups with the most contributions
The BCRD analysis shows that the groups with the highest contribution to inflation were housing, with a contribution of 3.45%), food and non-alcoholic beverages (1.17%) and transportation (0.88%), which explained 75% of inflation. of January 2022. To a lesser extent, the positive variations in the price indices of the groups goods and miscellaneous services (0.70%), restaurants and hotels (0.77%) and education (2.17%) had an impact.
It adds that the housing group, first in contribution in the general CPI for the month of January 2022, varied 3.45%, as a result of the increase in electricity service rates by 15.43%, provided for in the resolution of the Superintendence of Electricity, in the framework of the National Agreement for the Reform of the Electricity Sector. The Central Bank report also indicates that the behavior of this group was affected by increases in liquefied petroleum gas for domestic use (LPG) with a contribution of 2.20%, housing maintenance services 0.89% and paintings ( 0.59%).
Mismatched behavior in groups
The BCRD reported that the analysis of the results of the CPI for January by socioeconomic strata shows that the quintiles with the lowest income registered increases of 1.18% in quintile 1; 1.27% in quintile 2 and 1.22% in quintile 3, affected by increases in the prices of electricity, food, personal care and meals outside the home. In the quintiles with the highest income, the inflation rates are 1.30% and 1.07%, respectively.
