Macroeconomic Forecast Dominican Republic

March 2008 | Macroeconomic Forecasts

BMI View: The government has announced measures to allow imports of equipment and machinery tax free in order to boost local farming productivity, with the long-term aim of looking into crop diversification, particularly within the biofuels industry. In the shorter term, it is hoped that the measures could help to cool inflationary pressures, as the country has been hurt in recent months by surging agricultural and energy prices. Consumer price inflation hit a 17-month high of 9.1% y-o-y in January, driven largely by food and drink prices. We see the headline rate moderating to 6.5% by year-end, although the risks at this point are clearly to the upside.

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