The Central Bank of the Dominican Republic (BCRD) published its latest inflation report for August 2023. The consumer price index (CPI) increased by 0.52% in August, bringing the annual inflation rate to 4.27% for the period of August 2022 to August 2023. This rate is within the target range of 4.0% ± 1.0% set by the monetary program.
The report emphasizes the effectiveness of the Central Bank’s monetary policy in maintaining price stability. It also highlights that the Dominican Republic’s annual inflation rate is among the lowest in Latin American countries, showing successful efforts to manage CPI variation within target ranges.
The core inflation rate for August 2023 was 4.82%, also within the target range of 4.0% ± 1.0%. This rate has been decreasing, averaging a monthly variation of 0.32% in the last seven months. This trend is expected to continue, allowing for the implementation of monetary stimulus measures authorized by the Monetary Board.
The downward trend in underlying inflation opens up opportunities for initiatives to decrease bank interest rates, expand credit to the private sector, and support productive activities and economic growth.
The report also breaks down the price variation by different categories. The Food and Non-Alcoholic Beverages group had the biggest contribution to inflation in August, with a 1.27% increase. This was driven by price increases in items such as fresh chicken, green bananas, potatoes, eggs, and sugar.
Other groups, such as Education, Transportation, Housing, and Miscellaneous Goods and Services, also had impacts on inflation, with varying rates of increase.
The Central Bank report emphasizes the importance of effective monetary policies in controlling inflation and ensuring price stability in the Dominican Republic, ultimately contributing to a healthy economic environment.