Dominican Republic shows resilience against inflation in 2023
Santo Domingo.- Throughout 2023, the Dominican Republic faced challenges due to the high cost of essential products, influenced by global events beyond local control. The COVID-19 pandemic, which affected the world from early 2020 to 2022, and the Russia-Ukraine war starting in February 2022, significantly impacted the world economy. These events increased freight costs for raw materials and fertilizers, raising food production and housing project costs in the Dominican Republic. Despite this, prices remained relatively stable in 2023, with maritime freight costs dropping by over 50%.
Opposition politicians have criticized the government for these economic pressures. However, Eddy Alcántara, executive director of the National Institute for the Protection of Consumer Rights (Pro Consumidor), states that the Dominican Republic was one of the Ibero-American countries least impacted by inflation in 2023. This is supported by a study from the Ibero-American Forum of Government Consumer Protection Agencies (FIAGC), placing the country third among those least affected by inflation, behind Paraguay and Bolivia.
Essential products like fresh chicken, eggs, oil, and rice showed price stability. Fuel prices remained almost constant throughout the year, benefiting from government subsidies. For example, Premium Gasoline and Regular Gasoline saw a slight reduction in price by the end of December 2023.
Additionally, the government maintained various measures to mitigate inflation’s impact. These included fuel subsidies and financial support to sectors like electricity, transportation, and food production. In 2022, the government allocated substantial funds to these sectors, positively impacting product prices in 2023.
The Central Bank’s financial policies, such as interest rate adjustments, have been effective in curbing inflation, with expectations for the recovery of real wages for the working class. Juan Lantigua, manager of Institutional Relations at the Savings and Credit Bank (Banfondesa), noted that these policies significantly benefit the working class.