Dominican Republic: Inflation picks up marginally in June
June 30, 2017
Consumer prices increased a marginal 0.06% in June compared to the previous month and contrasting May’s 0.14% decrease. According to the Central Bank, June’s print was primarily driven by higher prices for recreation and culture as well as restaurants and hotels which offset lower prices for non-alcoholic food and beverages and housing.
Inflation in June came in at 2.6%, below the previous month’s reading of 3.1% and the lowest figure in five months. The rate dropped below the Central Bank’s target range of 3.0%-5.0% for the first time in five months. Annual average inflation in June reached an over-two-year high, coming in at 2.2% and slightly above May’s reading of 2.1%. Akin to FocusEconomics panelists, the Central Bank foresees inflation returning to the target range during the remainder of the year.
At its 30 June meeting, the Central Bank decided to leave the monetary policy rate unaltered at 5.75%. According to the Central Bank, economic activity is nearing potential growth of 5.0%, aided by an increase in credit availability to the private sector, while inflation remains in the target range and the fiscal deficit is narrowing. Meanwhile, a recovery in commodity prices should boost growth. Against this backdrop, officials decided to leave the monetary policy stance unchanged.
Author: Jan Lammersen, Economist