Inflation falls for the third consecutive month

Santo Domingo, DR.
The Central Bank reported this afternoon that the consumer price index (CPI) reflected a variation of 0.28% last October and indicated that it was below the 0.30% threshold for three consecutive months, bringing cumulative inflation from January-October 2022 to 6.31%.

As for inter-annual inflation, measured from October 2021 to October 2022, the monetary authority said it maintains a downward trajectory by standing at 8.24% in October, “a drop of 140 basis points with respect to the peak of 9.64% observed in April of this year,” explained the Central Bank confirming the forecast that inflation will stand at around 7% at the close of 2022.

“This downward trend in inflation allows projecting that inflation would be converging towards the target range of 4% ± 1% before the end of the second quarter of next year 2023,” assured the institution, as a result of the effectiveness of the timely measures adopted to mitigate the growth of prices, which evidences that the transmission mechanism of the monetary policy is operating.

It added that the subsidies implemented by the Government for fuels, the pause in the adjustment of electricity tariffs, and the initiatives to mitigate production costs in agriculture and livestock have also had an impact.

Inflation by groups
When analyzing the consumer price index for October 2022, it is highlighted that the groups with the highest contribution were Miscellaneous Goods and Services, growing by 0.90%, Food and Non-Alcoholic Beverages (0.29%), Restaurants and Hotels (0.46%), Transportation (0.17%), Housing (0.20%) and Furniture and Household Items (0.41%).

The CPI of the Miscellaneous Goods and Services group, the one with the highest incidence to the overall CPI result, grew 0.90%, mainly due to price increases registered in health insurance (5.75%), personal care services (0.75%), personal care items (0.79%) and celebration of events (3.56%).

The index of the Food and Non-Alcoholic Beverages group registered a moderate variation of 0.29%, mainly explained by the price increases observed in green bananas (3. 83%), green pigeon peas (8.78%), tomatoes (10.59%), peppers (5.63%), sweet potatoes (7.53%), yautía (7.28%), ripe plantains (3.47%), pork (0.91%), soft drinks (0.77%), potatoes (2.54%) and chicken broth (1.09%).

Likewise, the CB indicated that other food goods verified price decreases, such as fresh chicken (-2.82%), avocados (-5.14%), eggs (-1.01%), and garlic (-4.16%). It is important to note that the high incidence of the negative variation in the price of chicken contributed to lower CPI inflation of the Food and Non-Alcoholic Beverages group in October 2022.

The 0.46% growth of the CPI of the Restaurants and Hotels group is basically due to the increase in the prices of services of meals prepared outside the home, such as a dish of the day (0.39%), chicken service (0.68%), service of groceries with accompaniment (0.21%), empanadas (0.86%), sandwiches (0.51%) and juice served outside the home (0.65%).

Inflation was higher in the East.
The results of the CPI by geographic regions show that the consumer price index of the Ozama region, which includes the National District and Santo Domingo province, varied by 0.19%, the North region by 0.36%, the East region by 0.42%, and the South region by 0.25%. The higher variation registered in the CPI of the Eastern part is explained by the higher incidence of the Food and Non-Alcoholic Beverages group in that geographic area.

Inflation by socioeconomic strata
The behavior of the price index by socioeconomic strata shows that the lower income quintiles registered variations of 0.36% in quintiles 1 and 2, 0.32% in quintile 3, mainly due to increases in the price indexes of the Food and Non-Alcoholic Beverages group, land transportation services and the Miscellaneous Goods and Services group.

The higher income quintiles (4 and 5) showed inflation rates of 0.32% and 0.22%, respectively, due to the growth in the price indexes of the Miscellaneous Goods and Services and Food and Food and Non-Alcoholic Beverages groups.