Dominican Republic: Inflation rises to highest rate in almost three year
September 29, 2011
In August, consumer prices added 0.50% over the previous month. Higher prices for education (+3.75% month-on-month) as well as for healthcare (+0.50% mom) were the main drivers behind the increase. The August print was below the 0.85% rise in July but was above the 0.22% increase recorded in August 2010. Accordingly, annual headline inflation jumped from 9.9% in July to 10.2% in August, the highest level since October 2008. At the current level, inflation sits above the upper limit of the 5.0%-6.0% target range set by the Central Bank for 2011 for the ninth consecutive month. Despite the continued increase in inflation, at its 28 September meeting, the Central Bank decided to keep the monetary policy rate unchanged at 6.75%. The Bank has now refrained from raising interest rates for the fourth straight month, after two consecutive hikes in May and July.
Author: Armando Ciccarelli, Head of Data Solutions