Santo Domingo.– Economist Magín Díaz stated that the increase in inflation recorded in June is mainly due to the international impact caused by the Gulf War, which, as he explained, has generated one of the largest shocks in the prices of oil and other strategic inputs in recent years.
During his participation in the awards ceremony for outstanding economists organized by the Universidad Católica Santo Domingo (UCSD) and the Dominican College of Economists (CODECO), Díaz reacted to the Central Bank report that placed inflation at 5.67% during the month of June.
“The entire world has suffered this year one of the biggest oil shocks in history. Not only did the price of oil increase, but also that of agricultural inputs and fertilizers, as a result of the war in the Gulf,” the official pointed out.
The economist maintained that this behavior was foreseeable and assured that the Government adopted measures from the beginning of the conflict to face its effects. Likewise, he considered that the deviation from the inflation target is not significant and recalled that economies such as that of the United States have also maintained inflation levels above their targets for several years.
Díaz indicated that the Dominican economy continues to show growth and that the authorities are focusing their efforts on reducing the impact on the most vulnerable households, understanding that they are the most affected by the increase in the cost of living.
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Regarding the recently announced economic measures, he ruled out that they would cause greater inflationary pressure.
He explained that neither the ITBIS nor most selective consumption taxes were modified, and noted that the increase in revenue would come mainly from income tax, which he described as a direct tax that does not significantly affect the prices of goods and services.
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Furthermore, he maintained that the magnitude of the reform is small and that the economy has the capacity to adjust quickly, so he does not foresee a significant impact on inflation.
