It highlights that the year-on-year inflation of 3.35% recorded in December 2024 is one of the lowest in Latin America, after the dollarized economies of the region.
SANTO DOMINGO. -The Central Bank of the Dominican Republic (BCRD) reported yesterday that the consumer price index (CPI) showed a year-on-year variation of 3.35% in December 2024, lower than the rate of 3.57% observed in December 2023, being the lowest annual inflation in the last six years.
With this result, inflation remains between the lower limit and the center of the target range of 4.0% ±1.0% established in the monetary program, according to a statement from the agency.
Regarding year-on-year core inflation, the monetary policy regulator notes that it reached a level of 4.01% for December 2024, remaining around the center of the target set by the Central Bank.
"This indicator allows for clearer signals to be drawn for the conduct of monetary policy, because it excludes some items that do not normally respond to liquidity conditions in the economy, such as foods with highly variable prices, fuels and services with regulated prices such as electricity rates, transportation, as well as alcoholic beverages and tobacco," he emphasizes.
The Central Bank of the Dominican Republic (BCRD) highlights that the year-on-year inflation rate of 3.35% recorded in December 2024 is one of the lowest in Latin America, after the region's dollarized economies (Panama, Ecuador, and El Salvador), as well as Peru and Costa Rica. It should be noted that in the case of Costa Rica, the year-on-year appreciation of its currency against the US dollar, while contributing to lower inflationary pressures, is reducing the competitiveness of its exports.
Variation by group
The BCRD report explains that, in the comparative analysis of the month of December with November 2024, a monthly variation of 0.70% is observed, explained in large part by the behavior of the Food and Non-Alcoholic Beverages group which experienced a variation of 1.53%, due to the increase in the prices of products such as green plantains, chicken, peppers, onions, coffee, green bananas, eggs, potatoes, rice, among others.
Regarding the price index for the Miscellaneous Goods and Services group, the second largest contributor to the month's inflation, the Central Bank of the Dominican Republic (BCRD) reports a variation rate of 1.14%, driven by price increases in personal care services and products. To a lesser extent, price increases in services related to event planning also contributed to the rise.
Meanwhile, the Transportation group registered an inflation rate of 0.29%, attributed mainly to the increase in automobile prices and vehicle repair services. It is important to note that the subsidy for domestic fuels provided by the Executive Branch has mitigated the impact of this group on the overall CPI variation.
Regarding the Consumer Price Index (CPI) for the Restaurants and Hotels sector, it showed a variation of 0.53%, driven by the rise in prices of food prepared outside the home. Meanwhile, the Housing group showed an inflation rate of 0.16% as a result of increases in housing rental prices, while the Health group reported inflation of 0.33% due to the rise in prices of antihypertensive medications.
Inflation of Tradable and Non-Tradable Goods:
The Central Bank of the Dominican Republic (BCRD) reports that the Consumer Price Index (CPI) for tradable goods increased by 0.70% in December 2024, driven by price hikes in some food items. This increase was further fueled by price increases in vehicles, bottled beer, and tour packages, among other items. Similarly, the monthly variation in the index for non-tradable goods and services was also 0.70%.
Inflation by Geographic Area:
Regarding inflation by geographic region in December compared to November 2024, the price index for the Ozama region, which includes the National District and Santo Domingo province, increased by 0.74%, the North region by 0.68%, the East by 0.65%, and the South by 0.66%. The higher inflation rate observed in the Ozama region is due to the greater impact of the Miscellaneous Goods and Services, Transportation, and Recreation and Culture groups.
Inflation by Quintiles:
The monetary authority indicates that the price indices by socioeconomic strata reflected inflation rates of 1.03% in the first quintile, 0.91% in the second quintile, and 0.78% in the third quintile. The highest income quintiles, the fourth and fifth, showed variations of 0.78% and 0.54%, respectively. The higher rates recorded in the first, second, and third quintiles stem from the greater contribution of the Food and Non-Alcoholic Beverages and Miscellaneous Goods and Services groups. It should be noted that the rates observed in the fourth and fifth quintiles are due to price increases in vehicles, with the variations observed in the Food and Non-Alcoholic Beverages and Miscellaneous Goods and Services groups having a lesser impact.
