Dominican Republic Inflation May 2017

Dominican Republic

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.

FocusEconomics Consensus Forecast participants expect inflation to end 2017 at 3.3%, which is down 0.1 percentage points from last month’s projection. In 2018, the panelists project inflation to increase to 3.8%.

Author:, Economist

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Dominican Republic Inflation Chart

Dominican Republic Inflation June 2017 0

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

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