Inflation in Dominican Republic Still the Highest in the Region

• The post-pandemic crisis and the war in Ukraine have unleashed a global inflationary wave that the countries in the CARD region have not escaped. The CARD region includes Honduras, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic. 
• According to a report by the Central American Monetary Council, as of February of this year, the Dominican Republic has the highest level of year-on-year inflation (9%), exceeding Nicaragua (7.8%), El Salvador (6.7%), Honduras (6.4%), Costa Rica (4.9%) Guatemala (3.0%) and Panama, which has the lowest rate of 2.7%. 
• Within the region, the groups “Food and Non-Alcoholic Beverages”, “Housing,” and “Transportation” have experienced the greatest effects of inflation due to the instability in fuel prices and the increases in the products of the basic basket. 
• The Dominican Republic Central Bank continues to implement its monetary normalisation plan to counteract external shocks on prices and contribute to the convergence of inflation to the target range. 
• On February 1, 2022, the Central Bank of the Dominican Republic (BCRD) ordered a 50 basis point (bp) increase in the policy rate, joining other Latin American policy-makers in confronting high inflation. This brings the policy rate to 5%. The decision marks the third consecutive rate increase for the BCRD, following a 50bp hike in November and a 100bp jump in December.

 (Source: Dominica Today)