He central bank of the Dominican Republic (BCRD) reported today that the variation of the consumer price index (CPI) was 0.63% in January 2023 compared to December 2022.
He indicated that in this way the YoY inflation, measured from January 2022 to January 2023 at 7.24%, a total of 59 basis points below the 7.83% registered in December 2022.
The institution explained in its report that the Underlying inflation registered a monthly variation of 0.69% in January 2023. Thus, the Underlying inflation year-on-year was 6.60% in the referred period.
He specified that this indicator makes it possible to extract clearer signals for conducting the monetary politics because it excludes items with great variability in their prices such as some food, as well as fuel, services with regulated prices such as electricity rates, transportation and alcoholic beverages and tobacco.
The BCRD indicated that the behavior of the inflation is consistent with its monetary stance, “which has contributed to mitigating domestic demand pressures, combined with the government subsidies to fuels and electricity rates”.
In addition, he pointed out that the prices of the commoditiesparticularly oil and food, and container shipping costs globally.
It added that, as long as the transmission mechanism of the monetary politics and the conjunctural factors that have affected the volatile component of prices dissipate, mainly the effects of climatic phenomena, it is expected that inflation converge to its target range of 4% ± 1% during 2023.
Variation by groups
The analysis of the results of the general CPI during January 2023 shows that the group with the highest contribution to the inflation was food and Non-alcoholic beveragesregistering a variation rate of 1.32 %, which explains more than half of the inflation January overall.
To a lesser extent, the price indices of the groups Restaurants and Hotels (1.21%), Miscellaneous Goods and Services (0.80%), Housing (0.30%), Transportation (0.16%), Education (0.99%) and Health (0.59%).
The inflation of the food group and Non-Alcoholic Beverages was explained by the price increases observed in:
- Fresh chicken (4.64%)
- Green bananas (3.26%)
- Eggs (4.52%)
- Green bananas (6.96%)
- Sour lemons (40.08%)
- Potatoes (6.01%)
- Pork (1.97%)
- Chicken broth (2.15%)
- Ice cream (10.14%)
- Rice (0.33%)
- Soaked bread (1.16%)
- Ripe bananas (2.70%)
- Tomato paste (1.54%)
- Cassava (1.13%)
- Water bread (1.16%)
Other food goods recorded decreases in their prices such as:
- Onions (-5.32%)
- Tomatoes (-7.57%)
- Garlic (-3.12%)
The monthly report of the BCRD highlighted that, however, the increase in the prices of some foods with a high weight in the family basket such as bananas, chicken and potatoes, this growth has been less than in the previous month.
Therefore, indicated the BCRD, the variation The CPI of 1.32% of the referred group in January was lower than the rate of 2.09% registered in December 2022, evidencing a slowdown.
The report added that the CPI of the Group Restaurants and Hotels grew 1.21%, mainly due to increases in the prices of food services prepared outside the home such as dish of the day (1.04%), food service with accompaniment (1.49%), chicken service (1.14%), empanadas (2.85%) and sandwiches (1.40%).
He stressed that the rise in the price index observed for this group is the result of price increases in the basic inputs for its preparation, including meat, oil, rice, the bananas and the cassava.
Also, the breads, sausagesfish and cheese, among others, which directly affect the consumer price of these food services.
Regarding the group price index Miscellaneous Goods and Servicesthe report highlighted that it increased by 0.80% during January 2023, mainly due to the price increases registered by services and personal care items, which varied 0.84% and 0.91%, respectively.
The growth of 0.30% in the CPI of the housing group It is basically explained by the increases of 0.44% in housing rental services, housing maintenance (0.82%), common expenses in co-ownership (1.30%) and paintings (0.99%).
The price index for the education group it reflected a variation of 0.99% in January 2023, essentially due to the increase in the prices of university education (2.00%).
While the CPI for health group it varied 0.59%, product of the increases registered in antihypertensives 0.54%, antidiarrheals (7.71%), vitamins (1.57%), analgesics (0.57%), cost of surgery (1.10%) and laboratory analysis (1.86%).
The variation of the CPI of the Transportation group in January 2023 it was 0.16%, mainly due to increases in car prices (3.75%), vehicle repair services (2.85%) and some ground transportation services such as public car tickets (0.52%) and by taxi (0.83%).
These increases, indicated the report, were partially offset by the reduction in the prices of tickets abroad (-25.85%), which seasonally occurs in this season, affecting that inflation of this group was not of greater magnitude.
In addition, the measures implemented by the Executive Power to subsidize the prices of the fuels households, which greatly affect the behavior of this group by reducing their impact on the variation of the general CPI.
Inflation of tradable and non-tradable goods
The BCRD explained that the CPI for the tradable goodswhich are those that can be exported and imported free of restrictions, varied 0.59% in January 2023 compared to December 2022.
While the CPI for the goods and non-tradable services, which by their nature can only be marketed within the economy that produces them or are subject to measures that limit their imports, grew 0.68% in January 2023.
Inflation by geographic areas
The analysis by geographical regions showed that the variation of the consumer price index of the Ozama region, which includes the National District and the province Santo Domingowas 0.62%, in the North or Cibao region 0.48%, East region 0.78% and the South region 0.93%.
The greater variation registered in the CPI of the South region is mainly explained by the higher incidence of the CPI of the Food and Non-alcoholic beverages in that geographical area, while the lower variation rate observed in the CPI of the Cibao region is due to the negative variation of the Transportation group in this area.
Inflation by quintiles
The report by socioeconomic strata shows that the quintiles of lower income, that is, 1, 2 and 3, registered variations of 0.71%, 0.67% and 0.69%, respectively, due to increases in the price index of the Food and Non-Alcoholic Beverages group.
As to the quintiles with higher incomes (4 and 5), they registered rates of inflation of 0.71% and 0.38%, respectively.
In the quintile 4 index, the growth in food prices and the rise in the price of the carswhile in the result of the quintile 5 index, the increase in the CPI group Food and Non-Alcoholic Beverages it was partially offset by the negative variations in the communications group index and by the decreases in the prices of air tickets.
