Dominican Republic: Inflation holds steady in March
Latest reading: Inflation held steady at February’s 3.6% in March, marking the joint-highest level in over a year but remaining within the Central Bank’s target corridor of 3.0–5.0%. Looking at the details of the release, a drop in price growth for healthcare, hospitality and recreation broadly offset a sharper rise in transport plus housing and utilities costs compared to the prior month.
In terms of annual average inflation, the trend was unchanged, with March coming in at February’s 3.3%. Meanwhile, core inflation was also unchanged, coming in at February’s 4.2% in March.
Lastly, consumer prices rose 0.31% from the previous month in March, largely in line with February’s 0.32% rise.
Outlook: Our panelists expect inflation to rise from March’s level in the coming quarters, driven by the delayed effects of monetary policy easing and rising domestic demand. In addition, our Consensus sees inflation increasing this year in comparison to 2024 and being above the Central America and the Caribbean average as a result of a weaker domestic currency lifting the price of imports. That said, inflation is set to remain within the Central Bank’s target range. A stronger-than-expected hurricane season and greater-than-expected inbound tourism plus imported energy and food costs pose upside risks to inflation. However, a longer-than-expected delay to energy subsidy withdrawals presents a downside risk.
Panelist insight: Analysts at EmergingMarketWatch said:
“Core inflation remained in line with the monthly increases of 0.4% to 0.5% m/m seen since late 2024, signaling low inflationary pressures in the economy. This gives the [Central Bank] room to resume its rate-cutting cycle going forward to help sustain economic activity momentum.”