Dominican Republic Inflation August 2016

Dominican Republic

Dominican Republic: Inflation slows in August

September 7, 2016

In August, consumer prices declined 0.06% over the previous month, which contrasted the 0.19% rise observed in July and marked the lowest reading in four months. According to the Central Bank, the increase mainly reflected lower prices for food and non-alcoholic beverages and for transport.

Inflation in August edged down to 1.5% from July’s 1.9%, marking a 10-month low and keeping headline inflation well below the lower bound of the Central Bank’s tolerance margin of plus/minus 1.0 percentage point around its 4.0% target rate. Annual average inflation inched up from July’s 1.6% to 1.7%.

At its meeting on 31 August, the Central Bank decided to maintain its monetary policy rate at 5.00%, taking into consideration the inflation outlook, market expectations and recent developments in the most important macroeconomic indicators—mainly the good performance of GDP in the second quarter of the year, which expanded 8.7% in annual terms.

FocusEconomics Consensus Forecast participants expect inflation to end 2016 at 2.5%, which is down 0.1 percentage points over last month’s projection. Panelists project inflation of 3.1% in 2017.

Author: Massimo Bassetti, Economist

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