Dominican Republic: Inflation reaches five-month high
June 8, 2014
In May, consumer prices rose a meager 0.02% over the previous month, which was well below the 0.43% rise recorded in April. The figure marked the lowest monthly increase in seven months. According to the Central Bank, the increase mainly reflected higher prices for transport as well as for healthcare, which offset lower prices for food and non-alcoholic beverages as well as for housing.
Annual headline inflation rose from 3.5% in April to 3.7% in May and marked the highest rate in five months. Inflation is still within Central Bank’s tolerance margin of plus/minus 1.0 percentage points around its 4.5% target rate.
At its meeting on 30 May, the Central Bank maintained its monetary policy rate at 6.25%, which followed a similar decision in April. The Bank justified its decision by pointing out that growth in the developed economies is gradual and that domestic inflationary pressures are subdued.
Author: Dirina Mançellari, Senior Economist