The Central Bank (BCRD) reported that the variation in the Consumer Price Index was 0.47% in November 2022 compared to October, with accumulated inflation January-November 2022 standing at 6.80%.
Regarding the interannual inflation measured from November 2021 to November 2022, it continues with its downward trajectory, settling at 7.58%, for a reduction of 206 basis points with respect to the peak of 9.64% registered in April of this year, due to which is projected that inflation would close the year 2022 around 7.2%.
The Institution’s monthly report states that underlying inflation in November 2022 was 0.33%, after registering 0.36% in October, therefore, for the second consecutive month, it exhibits monthly rates that, when annualized, are consistent with the achievement of the inflation target of 4% ± 1% of the Monetary Program of the Central Bank.
Likewise, in year-on-year terms, core inflation continues to slow down from 6.86% in October to 6.59% in November 2022.It should be noted that this indicator isolates the behavior of certain foods with great variability in their prices, as well as fuels, services with regulated prices such as electricity rates, transportation and alcoholic beverages and tobacco, with the aim of extracting clearer signals. for the conduct of monetary policy.
The monetary entity highlights that the downward trend in inflation is mainly due to the successful combination of monetary policy measures adopted by the Central Bank and government subsidies for fuel and electricity rates, monetary and fiscal measures that will allow, according to The models of the Central Bank forecast system indicate that inflation converges to the target range of 4% ± 1% before the end of the second quarter of 2023.
The report explains that, in terms of Monetary Policy, the timely reaction by the Central Bank by adopting measures since November of last year, being one of the first in the region, has managed to locate the real interbank interest rate, defined as the difference in the nominal interbank rate and 12-month inflation expectations are some two hundred points above their neutral level, so the observed results are on the right track, reflecting a decrease in domestic inflationary pressures.
It also highlights that, likewise, there has been a recent deceleration in the prices ofcommodities, particularly oil and food; as well as in the costs of container transport globally. In addition, the positive evolution and dynamism of foreign exchange-generating activities (tourism, exports, remittances and foreign direct investment) has favored the relative stability of the exchange rate, which has partially offset the impact of the imported component on prices.
Variation by groups
The analysis of the behavior of the general CPI shows that the group that contributed the most to inflation in November 2022 was Food and Non-Alcoholic Beverages, varying 0.92%, explaining approximately half of the general inflation for the month. To a lesser extent, the groups Miscellaneous Goods and Services (0.69%), Transportation (0.33%), Restaurants and Hotels (0.51%), and Alcoholic Beverages and Tobacco (1.51%) had an impact.
The 0.92% growth in the price index of the Food and Non-Alcoholic Beverages group is mainly explained by the price increases observed in green plantains (10.85%), ripe plantains (12.32%), potatoes (8.98%), chicken broth (3.57%), garlic (9.05%), green bananas (3.36%), tomatoes (8.11%), fresh chicken (0.38%) and avocados (5.89%), while other food goods registered decreases in their prices such as eggs (-2.10%) and green pigeon peas (-7.34%). It is important to point out that the behavior of the prices of green and ripe bananas explains 0.11 percentage points of 0.47%, that is, 23.4% of the general inflation for the month of November. In this sense, it should be noted that banana plantations were affected by several tornadoes in the Cibao region.
The price index of the Miscellaneous Goods and Services group varied 0.69% in November 2022, mainly due to the price increases registered in services and personal care items, which experienced variations of 0.84% and 0.76%, respectively. While the CPI of the Alcoholic Beverages and Tobacco group increased by 1.51%, as a result of the increases in the prices of bottled beer (1.97%), malt (1.64%), aged rum (1.04%), white rum ( 1.12%) and golden rum (0.98%).
The CPI of the Transportation group registered an increase of 0.33% in the month of November, essentially due to the increases in the prices of air tickets (11.91%) and automobiles (0.48%). The moderate inflation of the Transportation group is the result of the measures implemented by the Executive Power to subsidize the prices of domestic fuels, which greatly affect the behavior of this group by reducing its impact on the variation of the general CPI.
Regarding the variation of 0.51% of the CPI of the Restaurants and Hotels group, it basically responds to the increase in the prices of food services prepared outside the home such as dish of the day (0.49%), chicken service (0.76%) and food service with accompaniment (0.50%).