SANTO DOMINGO –The Central Bank of the Dominican Republic (BCRD) reported that year-on-year inflation, measured from April 2023 to April 2024, was 3.03%, the lowest rate recorded in the last 46 months, since June 2020. This places year-on-year inflation at the lower limit of the target range of 4.0% ±1.0% established in the monetary program.
The monetary institution explains that the Consumer Price Index (CPI) experienced a monthly variation of -0.10% in April 2024, with the group most impacted by the price decline being Food and Non-Alcoholic Beverages, which saw a variation of -0.72%.
Regarding core inflation over the last twelve months, the Central Bank of the Dominican Republic (BCRD) highlights that it stood at 3.99% at the end of April 2024, remaining around the center of the BCRD's target range. This indicator allows for clearer signals to be drawn for the conduct of monetary policy, as it excludes certain items that do not typically respond to liquidity conditions in the economy, such as food items with highly volatile prices, fuels, and services with regulated prices like electricity and transportation, as well as alcoholic beverages and tobacco.
With this year-on-year inflation rate of 3.03% in April 2024, the Dominican Republic would be among the countries with the lowest inflation in Latin America, excluding dollarized economies (Panama, Ecuador and El Salvador).
Variationby groups
In the analysis of the monthly behavior of the general CPI, that is, the comparison of April with respect to March 2024, the Food and Non-Alcoholic Beverages group registered a variation of -0.72%, significantly impacting the result of the month.
The Central Bank of the Dominican Republic (BCRD) explains that this behavior is due to price reductions in high-value food items such as green and ripe plantains, fresh chicken, green bananas, tomatoes, peppers, cassava, potatoes, garlic, taro, eggplant, and lettuce. Meanwhile, price increases in rice, avocados, oranges, and sugar did not offset the reductions experienced by the aforementioned food items.
Similarly, the monetary institution adds that the Transportation group showed a negative variation of 0.22%, mainly due to price reductions in airfares. It highlights that the measures implemented by the Executive Branch, including the subsidy for domestic fuels, have had a significant effect on the performance of this group, mitigating its impact on the overall CPI variation.
The inflation rate for the Restaurants and Hotels group was 0.38%, primarily due to increased prices for meals prepared outside the home, such as set menus and groceries with side dishes. It is worth noting that tour packages saw a price decrease, which prevented the overall variation in this group from being more significant. Meanwhile, the Consumer Price Index (CPI) for the Miscellaneous Goods and Services group showed a variation of 0.24%, explained by price increases in personal care services.
The Housing group price index reached a variation of 0.19% as a result of increases in rental and housing maintenance services, while the variation of the Health group CPI was 0.51%, due to price increases registered in antihypertensive medicines, and to a lesser extent in analgesics and anti-inflammatories.
Inflation of Tradable and Non-Tradable Goods:
The monetary authority's report indicates that the CPI for tradable goods experienced a negative variation of 0.39% in April 2024, mainly due to price reductions in food items. Additionally, price decreases in airfare contributed to this decline. Meanwhile, the monthly variation of the index for non-tradable goods and services stood at 0.19%.
Inflation by Region:
The Central Bank of the Dominican Republic (BCRD) report explains that inflation by geographic region shows that the price index for the Ozama region, which includes the National District and Santo Domingo province, decreased by 0.14% in April 2024 compared to March of the same year. Similar figures were recorded for the North region (-0.11%) and the South region (-0.03%). The price basket for the East region increased slightly by 0.02%. The observed CPI rates for the Ozama and North regions are primarily attributed to the combined impact of price reductions in the Food and Non-Alcoholic Beverages and Transportation groups. Meanwhile, in the South region, the negative variation observed in the Food and Non-Alcoholic Beverages group was mitigated by increases in the Restaurants and Hotels and Miscellaneous Goods and Services groups.
Inflation by Quintiles:
The results of the price indices by socioeconomic strata reflected inflation rates of -0.18% for quintile 1, -0.13% for quintile 2, and -0.13% for quintile 3. Regarding the highest income quintiles, 4 and 5, they registered variations of -0.05% and -0.12%, respectively. It is noteworthy that quintile 1, the lowest income quintile, showed the largest price decrease in its basket, mainly due to reductions in the Food and Non-Alcoholic Beverages group, a trend also observed in quintiles 2 and 3. Quintile 5 was primarily influenced by price reductions in airfare.
