Dominican Republic Inflation

Dominican Republic

Dominican Republic: Inflation eases in June while Central Bank leaves rates unchanged

July 12, 2013

In June, consumer prices rose 0.04% over the previous month. The reading contrasts the 0.18% drop seen in May and marks the first price increase in the last three months. The reading mainly reflects how lower prices for food and non-alcoholic beverages as well as for clothing and footwear was more than offset by rising prices in the remaining categories.

Despite the positive monthly reading, annual headline inflation declined from 5.0% in May to 4.8% in June. At the current level, inflation sits comfortably within the Central Bank's target of 5.0% with a +/-1.0 percentage point tolerance margin.

Meanwhile, at its 30 June meeting, the Central Bank maintained the monetary policy rate at 4.25%, which follows an aggressive 75 basis points at the previous meeting in May. The Central Bank sees inflation converging towards the Bank's target in the medium term.

FocusEconomics Consensus Forecast participants expect inflation to end the year at 5.3%, which is down 0.3 percentage points over last month's projection. For 2014, panellists anticipate that inflation will moderate to 4.5% by year-end.


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Dominican Republic Inflation Chart

Dominican Republic Inflation May 2013

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

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