Dominican Republic: Inflation picks up further
August 29, 2011
In July, consumer prices added 0.85% over the previous month. Higher prices for food and non-alcoholic beverages (+2.00% month-on-month) as well as for healthcare (+0.83% mom) were the main drivers behind the monthly reading. That said, the July print was below the 1.02% rise recorded in June but was above the 0.34% increase recorded in July 2010. Accordingly, annual headline inflation jumped from 9.3% in June to 9.9% in July, the highest level since October 2008. At the current level, inflation sits well above the upper limit of the 5.0%-6.0% target range set by the Central Bank for 2011 for the eighth consecutive month. Despite the continued increase in inflation, at its 30 August meeting, the Bank decided to keep the monetary policy rate unchanged at 6.75%. The Central Bank has now refrained from raising interest rates for the third month in a row, after two consecutive hikes in May and June.
Author: Armando Ciccarelli, Head of Data Solutions