The Central Bank of the Dominican Republic (BCRD) reported that the monthly variation of the index of prices (IPC) in December 2021 was 0.73%, placing the inflation interannual, measured from December 2020 to December 2021, at 8.50%, exceeding the estimates made by the governor of the institution, Héctor Valdez Albizu.
Likewise, the BCRD reported that the inflation annualized underlying stood at 6.87% in December 2021, explaining that this indicator excludes some items whose prices they tend to be volatile or otherwise do not respond normally to monetary conditions.
In that sense, the inflation underlying isolates the behavior of certain foods with great variability in their prices, as well as fuels, managed and transportation services, alcoholic beverages and tobacco, thus allowing clearer signals to be extracted for conducting monetary policy.
The institution reiterates that the evolution of prices has been impacted by the situation in international trade markets, which has generated bottlenecks in supply chains, combined with substantial increases in container rates and global freight rates. Likewise, other external factors have had an impact, such as the increase in the prices of food supplies and other raw materials.
The bank explained that during December the groups with the highest incidence in the inflation were food and non-alcoholic beverages (0.81%), transportation (0.80%) and housing (0.90%), together explaining 63% of the inflation of the last month of last year 2021.
The foods that rose the most
In addition, the groups of miscellaneous goods and services (0.85%) and restaurants and hotels (0.94%) contributed. The CPI for the food and non-alcoholic beverages group registered a variation of 0.81% in December 2021, explained by increases in prices coffee (9.10%), eggs (3.57%), green bananas (3.32%), potatoes (7.86%), sour lemons (25.94%), green bananas (3.42%), pork (2.00%), pasta tomato (3.03%), red onions (3.16%), avocados (7.01%), beef (1.24%), pumpkin (7.32%), cod (1.72%) and carrots (7.45%) among others.
However, some food goods recorded declines in prices such as green pigeon peas (-19.24%) and peppers (-2.96%).
The inflation of the transportation group last month was 0.80%. It is mainly due to increases in prices of air tickets (14.65%), liquefied gas (LPG) for vehicles (2.78%), regular gasoline (0.27%) and diesel (1.27%), due to the weekly adjustments arranged by the Ministry of Industry, Commerce and Mipymes ( MICM), in compliance with Law 112-00 on Hydrocarbons. In addition, it contributed to the increase in prices of land transportation services by motoconcho (1.52%), by taxi (3.10%), by public car (0.65%), automobiles (0.61%) and vehicle repair services (0.53%).
index prices corresponding to the housing group reflected a variation of 0.90% in December 2021, explained to a greater extent by the 2.78% increase in the price of liquefied petroleum gas for domestic use (LPG), the housing rental service (0.58%) and some home maintenance and repair items (0.96%), such as painting (1.35%) and home maintenance services (0.75%).
Regarding the CPI for the miscellaneous goods and services group, the BCRD indicated that it grew by 0.85% in December 2021, mainly due to increases in prices in personal care services, such as men’s haircuts (2.22%), hair washing and styling (1.23%), in personal care items such as toilet paper (0.71%), disposable diapers (0.54%), deodorants (0.49%), toothpaste (0.33%), sanitary towels (0.52%) and razors (0.52%), in addition to vehicle insurance (1.06%).
The growth of 0.94% of the index of prices of the restaurants and hotels group, responds basically to the increase in prices of some food services prepared outside the home, such as the dish of the day (0.91%), chicken service (1.44%), food services with accompaniment (0.52%), sandwiches (0.75%), empanadas (1.24% ) and pizza (0.80%).
The BCRD highlighted that the rise in prices observed in the CPI for this group is the result of increases in basic inputs for its preparation, including meat, oils, rice, bread, sausages, cheese, gas, among others, which directly affect the increase in prices of these food services.
The analysis of the indices of prices by socioeconomic strata shows that the lowest income quintiles registered variations of 0.88% in quintile one, 0.78% in two and 0.73% in quintile three.
As for the quintiles with the highest income (four and five), they registered rates of inflation of 0.72% and 0.74%, respectively. In annualized terms, it shows that the lowest income quintiles (one, two and three) experienced rates of inflation slightly higher than the rest of the quintiles (fourth and five), as a result of the growth of prices of food goods during the year 2021.
Indeed, quintile one accumulated an annual variation of 8.71%, quintile two of 8.77% and quintile three of 8.49%, while quintiles four and five grew 8.17% and 8.10%, respectively, mainly due to the accumulated increase in price of fuels during 2021.
The results of the CPI by geographic region show that the index of prices to the consumer of the Ozama region, which includes 0% of the National District and the Santo Domingo province, varied 0.79%, the northern region 0.64%, the eastern region 0.64% and the southern region 0.79%.
