Dominican Republic Inflation January 2018

Dominican Republic

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.

FocusEconomics Consensus Forecast participants expect inflation to end 2018 at 4.0%, which is up 0.1 percentage points from last month’s projection. In 2019, the panelists project inflation will increase to 4.2%.

Author:, Economist

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Dominican Republic Inflation Chart

Dominican Republic Inflation January 2018

Note: Annual and monthly variation of consumer price index in %.
Source: Dominican Republic Central Bank.

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