The Dominican Republic is one of the Latin American countries that registered the highest inter-annual inflation in June 2021, according to an analysis by the Regional Center for Sustainable Economic Strategies (CREES) published on the 22nd of this month.
According to the study, prepared with data from the Organization for Economic Cooperation and Development (OECD) and central banks or official statistics centers, the country is placed only behind Venezuela, where inflation in the referred month was estimated at 2,615.5%, and Argentina, where it stood at 50.2%.
“In June 2021, the inter-annual inflation, that is, the variation of the Consumer Price Index (CPI) with respect to June 2020 in the Dominican Republic was 9.3%, placing it as the third country in the region with the highest increase in prices,” the analysis indicates.
The Dominican Republic is followed by Brazil, Uruguay, Mexico, Honduras, Paraguay, Guatemala, Chile, Colombia, Peru, El Salvador, Costa Rica, Panama and Bolivia. These last two were the countries with the lowest price increases, with 0.2% and 1.6%, respectively;
Ecuador was the only country with a negative variation, registering inflation of -0.7%.
“Inflation is a phenomenon of monetary origin, and as such reflects increases in monetary aggregates. As previously mentioned, as a result of the artificial stimulus policies adopted by the world’s states to face the COVID-19 pandemic, different economies, from developed and emerging countries, are showing higher increases in their prices than those that occurred before the pandemic”, explains the study.
Central Bank Report
The latest Consumer Price Index (CPI) Report of the Central Bank (BCRD) establishes that last June the inter-annual inflation registered a significant reduction, going from 10.48% in May to 9.32%. The agency emphasizes that this result constitutes a turning point towards a downward trend.
The document explains that the inflationary dynamics of the last months are not due to monetary or fiscal reasons, but to high inflationary pressures of external origin, as a result of the increase in the prices of commodities and raw materials that are part of the inputs in the production chain, as well as freight and maritime insurance due to the shortage of containers in the ports of origin.
The report, corresponding to June, also points out that recently there has been a reduction in the international prices of wheat, soybean and corn, which are important inputs for agricultural production, as well as wood and other imported goods demanded by the construction sector, for which it is expected that inflation will soon begin to moderate.
The inflation levels recorded in the country this year forced the Government to intervene and implement a series of measures to control price increases.