The Economist Paul De Leonfrom the Central American Business Intelligence (CABI), through a conference with journalists from the Latin American region, via the zoom platform, recommended to governments, including the Dominican Republic, to focus on local production and manufacturing to deal with the loss of people’s purchasing power due to high inflation.
Of Lion. when talking about the “global inflation update” He stressed that the DR changed its productive structure for tourism and services a long time ago, a sector that was severely affected by the pandemic.
He gave an example that The Dominican Republic no longer produces coffee, but importschanged agriculture for tourism and therefore, like Panama, depends more on imports than other countries in the region, such as Guatemala and Honduras.
He argued that the LAC region, including this country, is a “taker” of prices, with the exception of Brazil.
BCs will not control
The economics professional assures that in the region all central banks have their hands tied because the phenomenon (inflation) is global.
De Leon explained that the price situation is worrying and it is reaching the final consumer. It stems from commodities, the logistics chain and now the geopolitical situation with Ukraine, he said.
This situation will bring more poverty, greater migration to the North, violence and theft in these countries, where fiscal accounts are deteriorated by Covid-19 and high indebtedness. Inflation is reaching all countries.
The DR is the one with the highest inflation, “which has fluctuated between 10% and 8%”. The expert who said that inflation will not stop in the short term and explained the three reasons for global inflation: massive injection of money in the US, logistics crisis in ports and the omicron, and the energy crisis in Europe.