SANTO DOMINGO. – The Central Bank of the Dominican Republic (BCRD) reports that the consumer price index (CPI) registered a year-on-year variation of 3.16% in October 2024, lower than the rates of 3.29% in September, 3.42% in August and 3.54% in July, remaining between the lower limit and the center of the target range of 4.0% ± 1.0% for eleven consecutive months since December 2023.
The governing body highlights that this behavior is the result of a slowdown in monthly inflation observed during the last three months, reaching a rate of 0.09% in October 2024, explained mainly by the decrease in the growth rate of the prices of the foods with the greatest weight in the basic basket.
The Central Bank of the Dominican Republic (BCRD) reports that core inflation over the past twelve months fell to 3.96% at the close of October 2024, also remaining below the midpoint of the target range established by the BCRD. This indicator provides clearer signals for monetary policy, as it excludes certain items that are not typically affected by 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.
The monetary authority highlights that the Dominican Republic's year-on-year inflation rate of 3.16% in October 2024 is among 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 has contributed to lower inflationary pressures.
Variation by group
The BCRD report explains that, in the comparative analysis of October with September 2024, it is observed that the negative variation of 0.33% of the Food and Non-Alcoholic Beverages group was the largest contributor to the fact that inflation in the month of October was only 0.09%, as a result of price reductions in high weight food products such as fresh chicken, green and ripe plantains, peppers, onions, among others.
Regarding the Transportation group, it reports that this sector experienced inflation of 0.34% in October, primarily attributed to increases in airfare, vehicle, and tire prices. It should be noted that the measures implemented by the Executive Branch, including the subsidy for domestic fuels, have mitigated the impact of this group on the overall CPI variation.
The CPI for the Alcoholic Beverages and Tobacco group rose by 1.61%, driven by the increase in bottled beer prices. Miscellaneous Goods and Services had a similar impact, registering an inflation rate of 0.34% due to higher prices for personal care services.
Regarding the Restaurants and Hotels price index, the Central Bank of the Dominican Republic (BCRD) notes that it showed a variation rate of 0.33% as a result of increases in the prices of meals prepared outside the home, mainly in daily specials and chicken services. Meanwhile, the Health group price index registered a rate of 0.19%, reflecting price increases in hospital services and some pharmaceutical products.
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 0.25% in October 2024, driven by higher prices for bottled beer and some food items. Increases in airfare and automobile prices also contributed to this growth. The monthly variation in the index for non-tradable goods and services was -0.06%.
Inflation by Geographic Area
Regarding inflation by geographic region in October compared to September 2024, the governing body explains that the price index for the Ozama region, which includes the National District and Santo Domingo province, increased by 0.18%, in the North and East regions by 0.03%, and in the South region by 0.01%. The most pronounced variation observed in the Ozama region is attributed to the greater impact of the Transportation and Restaurant and Hotels groups. Meanwhile, the lower rates of variation recorded in the North, East, and South regions are primarily due to a greater effect of price reductions in food items within their respective baskets.
Inflation by Quintiles:
The Dominican monetary authority reports that the price indices by socioeconomic strata showed inflation rates of -0.01% for quintiles 1 and 2 and 0.01% for quintile 3, while the highest income quintiles, quintiles 4 and 5, showed variations of 0.10% and 0.22%, respectively. The higher rate observed in quintile 5 is explained by the greater impact of the transportation group, particularly by price increases in airfares and vehicle prices. The rates observed in quintiles 1, 2, and 3 are due to the negative variation in food prices.
