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Rise in food and housing fueled inflation in January, which was 1.18%

Rise in food and housing fueled inflation in January PHOTO: MERCADOM

Santo Domingo – The Central Bank of the Dominican Republic (BCRD) reported that the consumer price index (CPI) registered a variation of 1.18% with respect to the month of December 2021, while year-on-year inflation, measured from January 2021 to January 2022, 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.

The BCRD report establishes that core inflation for the month of January 2022 was 0.65% compared to December 2021.

This indicator excludes some items whose prices tend to be volatile or do not normally respond to monetary conditions, as is the case of goods or services with regulated prices.

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 in price, going from an average of US$71 in December 2021 to an average of US$83 during January 2022.

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.

Variation by groups

The BCRD analysis shows that the groups with the highest contribution to inflation were housing (3.45%), food and non-alcoholic beverages (1.17%) and transportation (0.88%), which explained 75% of the general inflation of January 2022 .

To a lesser extent, the positive variations of the price indices of the groups of goods and 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.

In addition, the behavior of this group was influenced by the rises in liquefied petroleum gas for domestic use (LPG) by 2.20%, home maintenance services by 0.89%, and painting (0.59%).

Regarding the 1.17% growth in the CPI of the food and non-alcoholic beverages group, he explains that this basically responds to increases in the prices of green bananas (10.79%), fresh chicken (0.66%), and sour lemons (25.62%). , rice (0.68%), green bananas (3.85%), eggs (1.59%), coffee (2.06%), pork (1.76%), potatoes (4.42%), beef (1.31%), olive oil soy (1.06%), avocados (5.69%), green pigeon peas (5.57%), ice cream (9.81%), tomato paste (1.56%) and salami (0.61%) among others, while chili peppers (-6.07%) , tomatoes (-3.49%) and onions (-1.39%) registered price drops.

The variation of 0.88% in the price index of the transport group in the month of January 2022 is due to the price increases of regular gasoline (2.24%) and Premium (2.52%), liquefied gas (LPG) for vehicles (2.20%) and diesel (3.24%), due to weekly adjustments arranged by the Ministry of Industry, Commerce and Mipymes (MICM).

Additionally, the increases in the prices of automobiles (1.26%), of land transport services in public cars (1.40%), in motoconcho (1.38%), in urban bus (1.79%) and taxi (1.65%) contributed. , as well as the vehicle repair service (0.85%).

In the opposite direction, price decreases were registered for tickets abroad (-33.26%), influencing that the inflation of this group was not of greater magnitude.

As for the CPI for the miscellaneous goods and services group, it grew 0.70% in January 2022, mainly due to price increases in personal care services, such as washing and styling hair (1.23%), haircut for men (0.69%), in personal care items (0.52%), in addition to birthday celebration services (8.75%).

The report adds that the 0.77% increase in the CPI for the restaurants and hotels group basically responds to the increase in the prices of food services prepared outside the home, such as the dish of the day (0.66%), the chicken service (1.17 %) and food services with accompaniment (0.72%).

It is important to reiterate that the price increase observed in the price index of this group is the result of the price increases of the basic inputs for its production.

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