SANTO DOMINGO.-The Central Bank of the Dominican Republic (BCRD) reported that the monthly variation of the Consumer Price Index (CPI) was 0.21% in March 2023. With this result, the year-on-year inflation rate stood at 5.90% at the end of March, the lowest rate recorded in the last 27 months, that is, since December 2020.
The slowdown experienced by inflation allows us to project that it will be converging to the target range of 4% ± 1% by mid-2023.
Regarding core year-on-year inflation, the Central Bank of the Dominican Republic (BCRD) indicated that it stood at 6.16% in March 2023, lower than the rates of 6.60% and 6.40% observed in the months of January and February of this year, respectively.
This indicator, the body explains, allows for clearer signals to be drawn for the conduct of monetary policy because it excludes some items that do not respond to monetary conditions, such as foods with highly variable prices, as well as fuels and services with regulated prices, such as electricity, transportation, and alcoholic beverages and tobacco.
"It is important to highlight that the downward behavior of inflation is consistent with the transmission mechanism of the monetary policy implemented by the BCRD, which has been reflected in liquidity conditions that have moderated the growth rate of monetary aggregates and contributed to mitigating the pressures of domestic demand in combination with the Government's subsidies for fuels and the electricity tariff," the statement notes.
It is worth noting that a relevant aspect to point out is that the price decreases recorded in items with high weight in the family basket such as fresh chicken (-0.90%), green plantains (-2.88%), potatoes (-8.79%), onions (-8.35%), ripe plantains (-3.86%) and garlic (-4.87%), along with the reduction in the prices of combined telephone, pay television and internet services, contributed to preventing inflation in March from being of a greater magnitude.
Variation by groups
Analysis of the overall CPI results for March 2023 shows that the groups contributing most to inflation were Miscellaneous Goods and Services (0.68%) and Food and Non-Alcoholic Beverages (0.26%), together accounting for approximately two-thirds of the month's inflation. Other groups that experienced positive changes were Restaurants and Hotels (0.40%), Housing (0.21%), Health (0.55%), and Transportation (0.10%).
The price index for the Miscellaneous Goods and Services group increased by 0.68% during March 2023, mainly due to increases in health insurance prices (6.34%), as well as in personal care services and items, which grew by 0.36% and 0.62%, respectively.
The 0.26% variation in the CPI of the Food and Non-Alcoholic Beverages group is mainly due to the price increases observed in foods such as cassava (4.34%), sour lemons (17.03%), chili peppers (6.81%), sugar (3.95%), avocados (8.11%), passion fruit (11.45%), pork (1.26%), rice (0.35%), green pigeon peas (4.47%) and green bananas (1.20%).
Regarding the price index for the Restaurants and Hotels group, it varied by 0.40%, primarily due to increases in the prices of prepared food services outside the home, such as the daily special (0.38%), grocery service with side dishes (0.45%), chicken service (0.41%), and juices served outside the home (0.57%). It is important to note that the observed increase in the price index for this group is a result of price increases in the basic inputs used in food preparation, which directly impact the consumer price of these food services.
The 0.21% increase in the Housing group CPI is mainly due to rises in housing rental services (0.22%), garbage collection services (3.88%), housing maintenance (0.73%), and painting (0.81%). Meanwhile, the Health group CPI rose by 0.55%, driven by increases in antihypertensives (0.47%), flu medications (1.32%), insulin (0.59%), vitamins (0.43%), thyroid medication (0.90%), analgesics (0.29%), bronchodilators (0.62%), and other items.
Regarding the CPI for the Transportation group, it varied by 0.10%, mainly due to price increases in international airfares (4.43%), vehicle repair services (0.35%), vehicle washing (2.11%), and some land transportation services such as motorcycle taxi fares (0.20%). These increases were mitigated by reductions in the prices of automobiles (-0.14%) and tires (-0.49%).
The price index for the Communications group reflected a variation of -1.13% in March 2023, mainly due to the decrease in prices of combined telephone, pay television and internet services by -3.14%, specifically in online digital data transmission services.
Inflation by geographic area
The Central Bank of the Dominican Republic (BCRD), in presenting the Consumer Price Index (CPI) results by geographic region for March 2023, indicated that the index for the Ozama region varied by 0.20%, the North region by 0.22%, the East region by 0.32%, and the South region by 0.16%. The higher variation observed in the CPI of the East region is explained by the greater impact of the Food and Non-Alcoholic Beverages and Miscellaneous Goods and Services groups in that geographic area during March.
