Wednesday, May 31, 2017

Dominican Rep. maintains rate, sees growth of 5-5.5%

    The Dominican Republic's central bank left its monetary policy rate at 5.75 percent, saying inflation is forecast to remain within its target range and economic growth this year should be between 5.0 and 5.5 percent, in line with its monetary program's projection.
     The Central Bank of the Dominican Republic (BCRD) raised its rate by 25 basis points on April 2 in the first hike since November last year due to an acceleration in inflation in February.
     Since then inflation has continued to rise but at a slower pace.
     Inflation in February jumped to 3.34 percent from 2.33 percent in January, but then eased to 3.14 percent in March before rising to 3.51 percent in April.
     The BCRD, which targets inflation of 4.0 percent, plus/minus 1 percentage point, added that underlying inflation, which is related to monetary conditions, amounted to 2.16 percent in April.
     Economic activity in the Dominican Republic grew by 5.2 percent in the first quarter of this year, gradually approaching the country's potential, but preliminary data for economic activity shows more moderate growth in April due to intense rains in some parts of the country, the bank said.
     Despite this, growth is seen in the range of 5.0-5.5 percent this year, down from an estimated 6.6 percent in 2016.
      Last month the International Monetary Fund said the economic outlook for the Dominican Republic was favorable, while the recent rise in fuel prices will push inflation to the target.
       The IMF forecast 2017 growth of 5.3 percent and 5.0 percent in 2018 and average inflation of 3.9  percent this year and 4.2 percent next year.



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