Dominican Republic: Inflation picks up pace in April
May 11, 2017
In April, consumer prices rose 0.27% from the previous month, which followed the 0.20% drop observed in March. According to the Central Bank, the increase mainly reflected higher prices for food and non-alcoholic beverages and transport outstripping lower prices for housing, clothing and footwear.
Inflation in April came in at 3.5%. This was above March’s 3.1% reading and marked the highest figure since June 2014. The rate remains within Central Bank’s 3.0%-5.0% target range and is quickly converging towards its midpoint. Both the Central Bank and FocusEconomics panelists expect inflation to remain within the target for the remainder of the year. Meanwhile, annual average inflation in April came in at a two-year high of 2.0%, which was a notch above March’s 1.9% figure.
At its meeting on 30 April, the Central Bank left unchanged its monetary policy rate at 5.75% after having hiked it at its March meeting from 5.50%. Inflation has picked up remarkable pace in recent months, while economic activity continues to grow above the country’s long-term potential and private lending remains at double-digit growth. Against this background, officials saw it opportune to increase the Bank’s main policy rate in March in a bid to partially defuse mounting inflationary pressures.
Author: David Ampudia, Economist