Dominican Republic: 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.”