Inflation drops to lowest level since June 2020 in January

Inflation came in at 3.3% in January, which was down from December’s 3.6%. January's figure marked the weakest inflation rate since June 2020. The slowdown was primarily driven by a softer rise in prices for food and transport. Moreover, prices for housing dropped. Accordingly, the trend pointed down, with annual average inflation coming in at 4.5% in January (December: 4.8%). Meanwhile, core inflation fell to 4.1% in January, from the previous month's 4.3%. Finally, consumer prices increased 0.39% from the previous month in January, a smaller increase than December's 0.54% increase.

Analysts at the EIU commented on the outlook: “On the one hand, inflation could come in below our forecasts if US economic growth is slower than we project, as this would dampen appetite for travel. On the other hand, a more dynamic pick-up in tourism to the Dominican Republic could spur economic growth and stoke price pressures. Moreover, the government could withdraw fuel and electricity subsidies earlier than we expect, which would also reignite inflationary pressures.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Dominican inflation projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for Dominican inflation.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Dominican inflation projections.

Want to get access to the full dataset of Dominican inflation forecasts? Send an email to info@focus-economics.com.