Galloping Inflation Bugs Economic Sectors in the Dominican Republic

Inflation in the Dominican Republic rose an incredible 24.4 percent in the first quarter of the ongoing year, while inflation rate for a single month peaked 62.3 percent in March, the country’s Central Bank reported today.

According to a press release issued by the CB, the consumer index was up 2.3 percent in the month of March.

The CB underlined such a price variation in March stood for “a significant slowdown from the numbers posted in January (9.2 percent) and February (11.2 percent) of last year.

This de-acceleration stems mainly from a number of monetary reforms applied with the sole intention of putting exchange rates on an even keel.

Soaring price tags for foodstuffs, beverages and cigars (they all combined for a 4.3 percent hike) explain the ebb and flow of the consumer index, followed by similar fluctuations in housing, assets, healthcare and a variety of other services.

However, transportation fell by 1.07 percent. Lower car prices brought on by declining exchange rates and the skyrocketing price of gas were definitely to blame.

In keeping with the Dominican government’s macroeconomic calculations, as part of the standby agreement inked with the International Monetary Fund (IMF), inflation is supposed to climb 14 percent in 2004 and 9.5 percent a year later.

For its part, President Hipolito Mejia, back from a lobbying trip to the U.S. to rally support for Dominican nationals living in that country in an effort to have them vote in the upcoming presidential elections, is upbeat that his nation will step out of the present economic crisis with the help of the IMF and steered by the good going of such strategic sectors as tourism and travel.

Recent polls taken in the Dominican Republic show incumbent Mejia trailing behind former President Leonel Fernandez of the opposition Dominican Liberation Party just less than a month away from the May 16 elections.