The economist Antonio Ciriaco Cruz considered that the main challenge for the Dominican economy for next year 2022 is the issue of inflation, which has hit a large part of the population in recent months, including those with low economic resources.
The also vice-dean of the Faculty of Economic and Social Sciences of the Autonomous University of Santo Domingo (UASD), explained that inflation this year ended above the goal and that has affected people’s real wages, after highlighting, that this phenomenon is global in nature because there is talk of imported inflation as a result of a break in the supply chain.
Said This situation is affecting the Dominican Republic in the production costs of the main companies Furthermore, it is altering a large part of the inputs that are used in many products that are used to make the basic food basket.
¨That is a great challenge that the Dominican economy and government authorities will have for the year 2022¨, he assured when being interviewed on the program Toque Final with Julio Martínez Pozo, which broadcasts every Sunday on Antena 7.
The economist reported that "international oil prices have come with a certain level of volatility and ended this year above $ 60 a barrel"However, he understands that for the next year that trend may change.
The price of oil, he said, is part of the increase that has occurred in fuels in 2021 and possibly in 2022, Depending on the behavior of demand in the economy, such reality may or may not be affecting the Dominican Republic, he said.
He said that we must take into account that oil is a very volatile good, it depends a lot on expectations and its behavior in this is not very predictable, but next year all fuel prices must be monitored, precisely because of the volatility it has the price of oil.
He emphasized that prices may remain between 65 and 70 dollars a barrel, which is a more or less reasonable price depending on the recovery and behavior of the world economy projected for the year 2022.
He further stressed that interest rates have started to rise, not only locally but also internationally. ¨The projection for 2022 is that the United States federal reserve continues with the reduction of the stimuli that in recent years, and basically in the pandemic, generated throughout the North American economy.
In this sense, it specifies that this implies an increase in interest rates at the international level and that in the country the Central Bank made a first modification of its monetary policy rate from 3% to 3.5%, which will have an impact in the rest of the interest rates in the financial markets in the Dominican Republic.
He assured that at a higher interest rate there is a reduction in private investment because that increases the cost of money and that of the projects that are going to start.
He added that everything seems to indicate that if the behavior of international inflation continues to increase, the Central Bank will also have to increase its monetary policy rate and the interest rate in the country will possibly be much higher.
The situation slows down the growth of the economy, For this reason, interest rates together with inflation are two important variables and risks for the Dominican economy for next year, ”he said.
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