Average inflation in Dominican Republic

Average inflation measures the average change over the year in the prices of the basket of goods and services consumed by Dominican households, based on the Consumer Price Index. It is compiled and tracked by the Central Bank of the Dominican Republic.

It is obtained from a regular price survey across a sample of outlets and regions, weighting each product by its spending share. Average inflation is the mean of the year's monthly rates of change relative to the prior year, expressed as a percentage.

Inflation is the central reference for the Dominican central bank's monetary policy, which runs an inflation-targeting framework. A reading above target puts upward pressure on interest rates and on the peso, while contained inflation gives room to ease.

As an annual average it smooths the year's peaks and troughs and reacts with a lag to recent price moves. It only measures the defined basket rather than every good; for the underlying trend, analysts look at core inflation, excluding energy and unprocessed food.