Dominican Republic: Inflation edges higher while activity indicators show strong recovery
- Late last week, the Central Bank reported that consumer prices rose by 0.8% month over month (MoM), and 7.9% YoY, in August. Annual inflation was 2 basis point (bp) higher than in July, thus stopping the convergence process projected by the monetary authority.
- Year to date, accumulated inflation was 5.4%, while 12-month average inflation jumped to 7.3%, its highest level since May 2012. The central bank reiterated that price pressures are mainly due to external shocks associated to food items and oil. In addition, it said that domestic inflation also reflects global supply disruptions, and that such distortions could last until early 2022.
- Meanwhile, other indicators continue to show that DomRep’s economic recovery keeps taking hold. On the fiscal front, preliminary data through the end of last month show a 41% YoY increase in revenues during the first eight months of the year, leading to an overall surplus of almost 0.2% of GDP (versus a 3.8% deficit in the same period of 2020).
- Total tourist arrivals reached almost 477,000 in August, more than triple the number a year before and almost the same as in 2019. On a YTD basis, arrivals totaled 2.9Mn, a 79% YoY increase and almost two thirds of the arrivals during the same period of 2019. The government projects that arrivals will total 4.5Mn this year, some three fourths of pre-pandemic levels.