Dominican Republic: Inflation edges down in January
February 15, 2018
Consumer prices rose 0.29% in January over the previous month, following a 0.97% month-on-month increase—the largest since January 2013—in December. According to the Central Bank, the deceleration in January was mainly driven by lower price increases for food and non-alcoholic beverages. Lower transport costs also contributed to January’s print, with airfares dropping considerably from the previous month, offsetting higher prices at the pump.
Inflation moderated to 3.9% in January from 4.2% in December. As a result, it came in slightly below the midpoint of the Central Bank’s inflation target range of 3.0%–5.0%. Core inflation, which excludes volatile items such as food and energy prices, remained stable from December at 2.4%—the highest level in nearly three years.
At its 31 January monetary policy meeting, the Central Bank kept the main policy rate unchanged at 5.25%, where it has been since July 2017. The Bank justified its decision by highlighting that inflation expectations for the next two years remain firmly entrenched within its target range.
Author: Javier Colato, Economist