Dominican Republic Inflation Rate MoM: November 2025 Analysis
The Dominican Republic’s latest inflation rate MoM surged to 0.55% in November 2025, surpassing expectations and marking a notable acceleration from October’s 0.34%. This report leverages the Sigmanomics database to contextualize the recent inflation dynamics, compare historical trends, and assess the broader macroeconomic implications for the country’s monetary policy, fiscal stance, and financial markets.
Table of Contents
The Dominican Republic (DO) recorded a 0.55% month-over-month inflation rate in November 2025, exceeding the 0.30% consensus estimate and rising sharply from October’s 0.34%. This marks the highest monthly inflation print since September’s 0.71% in the past year. The 12-month average inflation rate MoM stands at approximately 0.32%, indicating a recent upward trend in price pressures.
Drivers this month
- Shelter costs contributed 0.18 percentage points (pp), reflecting rising rental and utility prices.
- Food and beverages added 0.15 pp, driven by supply chain disruptions and seasonal demand.
- Transportation costs increased by 0.10 pp, influenced by higher fuel prices amid global energy volatility.
- Used cars and apparel exerted minor downward pressure (-0.05 pp combined), partially offsetting inflation.
Policy pulse
The inflation rate remains above the Central Bank of the Dominican Republic’s target band of 3% annual inflation, signaling persistent price pressures. The MoM acceleration to 0.55% suggests that monetary tightening measures may need to continue or intensify to anchor inflation expectations.
Market lens
Immediate reaction: The Dominican Peso (DOP) weakened by 0.30% against the US dollar within the first hour post-release, while 2-year government bond yields rose 12 basis points, reflecting market concerns over sustained inflation. Breakeven inflation rates also ticked higher, signaling increased inflation risk premiums.
Core macroeconomic indicators provide essential context for the inflation surge. The Dominican Republic’s GDP growth remains robust at an annualized 4.20%, supported by tourism and export sectors. However, wage growth of 3.50% is beginning to outpace productivity gains, contributing to cost-push inflation.
Monetary Policy & Financial Conditions
The Central Bank has maintained a policy rate of 7.25% since September 2025, aiming to curb inflation without stalling growth. Financial conditions have tightened moderately, with credit growth slowing to 6% year-over-year. Inflation expectations remain elevated at 4.10% for the next 12 months, above the 3% target.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with a 2025 budget deficit projected at 3.80% of GDP. Increased government spending on infrastructure and social programs has supported demand but also added inflationary pressures. The government’s debt-to-GDP ratio stands at 45%, manageable but warranting caution amid rising borrowing costs.
External Shocks & Geopolitical Risks
Global energy price volatility and supply chain disruptions continue to impact import costs. The Dominican Republic’s reliance on imported fuel and foodstuffs exposes it to external shocks. Additionally, geopolitical tensions in key trade partner regions have increased uncertainty, potentially affecting export demand and currency stability.
Drivers this month
- Shelter inflation rose 0.18 pp, reflecting higher rents and utility costs.
- Food inflation contributed 0.15 pp, influenced by supply chain delays and commodity price increases.
- Transportation costs added 0.10 pp amid rising fuel prices.
- Used cars and apparel exerted a combined negative effect of -0.05 pp.
Policy pulse
The inflation print remains above the Central Bank’s comfort zone, suggesting that current monetary policy settings may be insufficient to fully contain price pressures. The data supports the possibility of further rate hikes or extended tightening to anchor inflation expectations.
Market lens
Immediate reaction: The DOP depreciated by 0.30% against the USD, while 2-year government bond yields increased by 12 basis points. Breakeven inflation rates rose slightly, indicating heightened inflation risk perception among investors.
This chart highlights a clear upward trend in inflation after a brief moderation period. The acceleration in November signals renewed inflationary pressures, driven by core components such as shelter and food. This trend suggests that inflation may remain elevated in the near term, posing challenges for monetary policy and financial stability.
Looking ahead, inflation in the Dominican Republic faces a mix of upside and downside risks. The baseline scenario projects inflation MoM averaging 0.40% over the next six months, supported by stable commodity prices and moderate wage growth. This scenario carries a 50% probability.
Bullish scenario (30% probability)
- Global energy prices decline sharply, easing transportation and production costs.
- Supply chain normalizes, reducing food price volatility.
- Monetary policy tightening successfully anchors inflation expectations, bringing MoM inflation below 0.25%.
Bearish scenario (20% probability)
- Persistent global supply disruptions and geopolitical tensions push import prices higher.
- Wage growth accelerates beyond productivity, fueling cost-push inflation.
- Monetary policy lags, allowing inflation to rise above 0.70% MoM, risking a wage-price spiral.
Structural & Long-Run Trends
Structural inflation drivers include urbanization, increasing housing demand, and gradual currency depreciation. Long-run inflation expectations remain anchored but vulnerable to external shocks. Continued fiscal discipline and monetary vigilance will be critical to maintaining price stability.
The Dominican Republic’s November 2025 inflation rate MoM of 0.55% signals a notable uptick in price pressures, exceeding market expectations and reversing recent moderation. Core drivers include shelter, food, and transportation costs, all influenced by both domestic and external factors. Monetary policy faces a delicate balancing act between containing inflation and supporting growth amid fiscal expansion and external uncertainties.
Financial markets have responded with currency depreciation and rising bond yields, reflecting increased inflation risk. Policymakers must weigh the risks of further tightening against potential growth headwinds. Structural trends suggest inflationary pressures may persist, underscoring the need for coordinated fiscal and monetary strategies.
Overall, the inflation outlook remains cautiously elevated, with scenarios ranging from a gradual easing to a more pronounced acceleration depending on global developments and domestic policy responses.
Key Markets Likely to React to Inflation Rate MoM
Inflation data in the Dominican Republic typically influences currency markets, bond yields, and select equities sensitive to domestic economic conditions. The following tradable symbols have historically shown price movements correlated with inflation trends in DO, making them key instruments for investors tracking inflation dynamics.
- DOPUSD – The Dominican Peso to US Dollar pair reacts directly to inflation-driven monetary policy shifts and external trade conditions.
- DOMEX – A Dominican equity index sensitive to inflation and economic growth fluctuations.
- BTCUSD – Bitcoin often serves as an inflation hedge, with price movements influenced by inflation expectations globally.
- USDDOP – The inverse of DOPUSD, reflecting currency strength and inflation impact.
- DOMBANK – A leading Dominican bank stock, sensitive to interest rate changes driven by inflation.
Inflation Rate MoM vs. DOPUSD Since 2020
| Year | Average Inflation Rate MoM (%) | DOPUSD Annual Change (%) |
|---|---|---|
| 2020 | 0.28 | -2.10 |
| 2021 | 0.35 | -1.50 |
| 2022 | 0.40 | -3.00 |
| 2023 | 0.33 | -0.80 |
| 2024 | 0.30 | -1.20 |
| 2025 (YTD) | 0.38 | -2.50 |
Insight: The table illustrates a moderate inverse correlation between inflation rate MoM and DOPUSD exchange rate changes. Higher inflation periods tend to coincide with DOP depreciation, reflecting inflation’s impact on currency valuation and monetary policy responses.
FAQs
- What is the latest inflation rate MoM for the Dominican Republic?
- The most recent inflation rate MoM for the Dominican Republic is 0.55% as of November 2025, exceeding market expectations and prior month readings.
- How does the inflation rate MoM affect the Dominican Peso?
- Higher inflation rates typically weaken the Dominican Peso (DOP) due to expectations of tighter monetary policy and reduced purchasing power, as seen in recent market reactions.
- What are the key risks to the inflation outlook in the Dominican Republic?
- Key risks include global energy price volatility, supply chain disruptions, wage growth outpacing productivity, and geopolitical tensions affecting trade and currency stability.
Selected Tradable Symbols
- DOPUSD – Forex pair directly impacted by inflation and monetary policy in the Dominican Republic.
- DOMEX – Dominican equity index sensitive to inflation and economic growth.
- BTCUSD – Bitcoin as a global inflation hedge.
- USDDOP – Inverse currency pair reflecting inflation-driven currency moves.
- DOMBANK – Dominican bank stock sensitive to interest rate changes.
The inflation rate MoM for November 2025 at 0.55% represents a sharp increase from October’s 0.34% and is well above the 12-month average of 0.32%. This upward movement reverses a two-month moderation trend seen in August and September, where inflation peaked at 0.71% before easing.
Comparing historical data, November’s print is the highest since September 2025 and exceeds the average monthly inflation rate recorded in the first half of 2025, which hovered around 0.15%. The acceleration is driven primarily by shelter and food price increases, consistent with seasonal and structural factors.