SANTO DOMINGO.-The Central Bank of the Dominican Republic (BCRD) reports that the consumer price index (CPI) registered a monthly variation of 0.39% in January 2024, resulting in an interannual inflation rate measured from January 2023 to January 2024 of 3.32%, exhibiting a reduction of 393 basis points compared to the variation registered in January 2023 of 7.24%.
Thus, year-on-year inflation remains below the center target range of 4.0% ± 1.0% established in the monetary program, the Central Bank's monthly report indicated.
The monetary institution indicates that inflation has maintained a downward trend, largely explained by the low impact of the Transportation group due to government fuel subsidies, as well as the relative stability of international oil prices over the past year. Similarly, despite price increases in Food and Non-Alcoholic Beverages, the year-on-year growth rate of the CPI for this group has slowed since October of last year, contributing to a lower overall CPI variation.
Regarding core inflation, the Central Bank of the Dominican Republic's (BCRD) monthly report explains that, over the past twelve months, it has maintained a downward trend, reaching 4.09% in January 2024, within the target range set by the Central Bank. This indicator provides clearer signals for conducting monetary policy, as it excludes certain items that do not typically reflect liquidity conditions in the economy, such as food with highly volatile prices, fuels, and services with regulated prices like electricity and transportation, as well as alcoholic beverages and tobacco.
Variation by Groups:
In the analysis of the monthly variation by groups, that is, the comparison of January 2024 with December 2023, it is observed that the CPI for the Transportation group registered a negative variation, partially offsetting the variation in the overall CPI in January 2024. This behavior is largely due to the price decreases seen in airfares, as well as the reductions in premium and regular gasoline prices, in accordance with the weekly adjustments established by the Ministry of Industry, Commerce, and SMEs (MICM). It is worth noting that the price increases seen in automobiles prevented the decline in this group's index from being more significant.
Within the Food and Non-Alcoholic Beverages group, items such as fresh chicken, chili peppers, rice, eggs, and green plantains, among others, experienced price increases. It is worth noting that the normalization of border trade has influenced the increase in demand and, consequently, the price evolution of some food items, although a moderation in the rate of increase for food products has been observed. It is important to point out that some items showed negative variations that contributed to a smaller increase in this group; these include garlic, cassava, and potatoes.
The Central Bank of the Dominican Republic (BCRD) indicates that the behavior of the Consumer Price Index (CPI) for the Miscellaneous Goods and Services group is primarily explained by price increases in health insurance and personal care services. Regarding the Restaurants and Hotels group, price increases were observed in meals prepared outside the home, such as daily specials, chicken, and grocery meals with side dishes.
Inflation of tradable and non-tradable goods
The report from the governing body states that the CPI of tradable goods experienced a variation of 0.27% in January 2024, explained by price increases in automobiles and some foods, which were partially mitigated by price reductions in air tickets.
Meanwhile, the index of non-tradable goods and services stood at 0.51%, due to price increases in fresh chicken, rice and ripe plantains, as well as increases in the rate of some services, including health insurance, streaming services, housing rental, among others.
Inflation by Geographic Area:
Inflation by geographic region shows that the price index for the Ozama region, which includes the National District and Santo Domingo province, varied by 0.44%, the North by 0.29%, the East by 0.39%, and the South by 0.48%. The most pronounced variation reflected in the CPI of the South region is essentially due to the greater variation and impact of the Food and Non-Alcoholic Beverages group in this area. Meanwhile, the lower variation observed in the North region results from a greater negative impact of the Transportation group.
Inflation by Quintiles:
The monetary authority's report adds that the price indices by socioeconomic strata show inflation rates of 0.23% for quintile 1, 0.30% for quintile 2, and 0.42% for quintile 3. Regarding the highest income quintiles, quintiles 4 and 5, these show growth of 0.47% and 0.27%, respectively. It is relevant to note that both quintile 1 and quintile 5 exhibited less pronounced rates of change compared to the other quintiles. With respect to quintile 1, some items in the Transportation, Goods and Services, and Health groups registered negative variations that partially mitigated the increases observed in Food, the group with the greatest weight in this stratum's basket. Meanwhile, in quintile 5, the effect was mainly due to the decrease in airfare prices.
