Dominican Republic’s Inflation Expected to Slow Down in 2023

The Ministry of Economy, Planning, and Development (MEPyD) officials have claimed that the adoption of restrictive monetary policies, coupled with the subsidies offered by the Dominican Government to counter the rise in fuel prices and the prolongation of the temporary suspension of adjustments to electricity rates, have helped slow down inflation. Furthermore, the drop in raw material prices in the global market and the worldwide costs of container transportation continue to affect the moderation of local price levels.

In the “Macroeconomic Panorama 2023-2027” report published by MEPyD, it is stated that inflation is projected to converge to the target range of 4% ± 1% in 2023, with an estimated year-end price growth of 4.5% and an average of 5.5%. The Central Bank of the Dominican Republic, on April 4, reported that the monthly CPI variation was 0.21% in March 2023, resulting in interannual inflation of 5.90% by the end of the month. The bank suggested that the slowing of inflation would result in a convergence towards the target range of 4% ± 1% by mid-year.

According to the MEPyD report, economic prospects for 2023 in the Dominican Republic are still influenced by the current global market’s level of uncertainty, given the tightening of financial conditions and the slowdown in major trading partner economies. The government institution explained that the country’s economy is expected to grow by 4.25% in 2023, 0.25 percentage points less than the macroeconomic forecast for November 2022, and these predictions remain vulnerable to the levels of uncertainty in the global market. The MEPyD assured its commitment to monitor the international environment and its potential effects on the domestic macroeconomic outlook.