SANTO DOMINGO – The Central Bank of the Dominican Republic (BCRD) reports that the Consumer Price Index (CPI) experienced a monthly variation of 0.37% in January 2025. With this result, the year-on-year inflation rate measured from January 2024 to January 2025 stands at 3.32%, remaining between the lower limit and the center of the target range of 4.0% ± 1.0% for fourteen consecutive months, that is, since December 2023.
The agency explains that core inflation year-on-year was 4.03% in January 2025, registering a monthly variation of 0.48% for that month. Thus, core inflation year-on-year remains around the midpoint of the target set by the central bank. This indicator provides clearer signals for conducting monetary policy because it excludes certain items that do not typically reflect liquidity conditions in the economy, such as food with highly volatile prices, fuels, transportation, and services with regulated prices like electricity, as well as alcoholic beverages and tobacco.
Variation by Group:
In the comparative analysis of January 2025 with December 2024, the report establishes that the Food and Non-Alcoholic Beverages group experienced a variation of 0.83%, accounting for more than half of the 0.37% inflation recorded in the first month of the year. It is worth noting that the second largest group in the CPI basket, Transportation, exhibited a negative rate of 0.29%, mainly due to price drops in airfares, which partially offset the inflation rate in the reference month. It is important to highlight that the subsidy for domestic fuels provided by the Executive Branch has mitigated the impact of this group on the overall CPI variation.
The monthly report highlights that, in the food sector, the variation was explained by price increases in products such as fresh chicken, coffee, green and ripe plantains, avocados, oranges, soft drinks, lettuce, cod, eggs, among others, which were partially offset by price reductions in onions, garlic and potatoes.
The Consumer Price Index (CPI) for the Restaurants and Hotels sector showed a variation of 0.71% due to increases in the prices of food services prepared outside the home. It should be noted that this increase stems from rises in the cost of certain supplies that directly impact the consumer price of these food services.
Regarding the Housing group, it showed an inflation rate of 0.29% as a result of increases in housing rental prices and paint. On the other hand, the price index for the Miscellaneous Goods and Services group showed a variation rate of 0.27% due to price increases in some services and personal care items. Meanwhile, the Health group reported inflation of 0.50%, influenced by increases in pharmaceutical products, particularly antihypertensives, analgesics, and anti-inflammatories.
Inflation of tradable and non-tradable goods:
The CPI for tradable goods experienced a variation of 0.33% in January 2025, due to the increase in some food items. In addition, increases in the prices of vehicles, tour packages, and other items contributed to this rise. Similarly, the monthly variation of the index for non-tradable goods and services was 0.40%.
Inflation by Geographic Area:
The Central Bank of the Dominican Republic (BCRD) explains that inflation by geographic region in January 2025, compared to December 2024, shows that the price index for the Ozama region, which includes the National District and Santo Domingo province, grew by 0.26%, the North region by 0.48%, the East by 0.38%, and the South by 0.43%. The higher inflation rate in the North region is due to a greater impact from the Food and Non-Alcoholic Beverages and Housing groups. Meanwhile, the lower variation observed in the Ozama region results from a larger negative contribution from the Transportation group.
Inflation by Quintiles:
The monetary authority concludes that the price indices by socioeconomic strata reflected inflation rates of 0.38% in the first quintile, 0.42% in the second quintile, and 0.46% in the third quintile. The highest income quintiles, the fourth and fifth, showed variations of 0.47% and 0.20%, respectively. The lower rate observed in the fifth quintile is explained by the combined effect of a greater impact from reductions in airfare prices and a smaller contribution from increases in food prices. Meanwhile, the fourth quintile showed the highest rate, driven by the increase in vehicle prices. The lowest income quintiles, the first, second, and third, were impacted by increases in food prices.
Finally, it is important to highlight that the year-on-year inflation of 3.32% recorded in January 2025, according to the latest information available to date, is among the lowest in Latin America, after the dollarized economies of the region (Panama, Ecuador and El Salvador), as well as Nicaragua, Peru, Guatemala and Costa Rica.
In this regard, it is projected that inflation in the Dominican Republic will remain within the target range of 4.0% ± 1.0% during 2025. The Central Bank continues to monitor external and internal conditions, taking timely measures to preserve macroeconomic stability and help ensure that the price evolution indicator remains close to the target set in the monetary program.
