Caribbean & Central America - October 2009 (ISSN 1741-4458)

Thanks to a fall in food and fuel prices, monthly inflation in September was just 0.11%. The rate was only positive rate because of the usual jump in the price of educational products at the start of the school year (6.35% this September). The central bank reported that accumulated inflation for the year to date was 4.3%, well down on the 10.76% in the same period of 2008. The annual rate was -1.57%: annual inflation has been negative since July this year. In September, the price of goods in the transport index fell 0.87% month-on-month; while the food, drink & tobacco index fell 0.48%. Together, these two categories account for the bulk of goods in the overall index. There is some questioning, locally, of the official inflation figure. Most Dominicans say that they do not believe inflation is actually falling, because prices are still rising.

Debt: In early October a former finance minister, Fernando Álvarez Bogaert, issued a warning about the high level of indebtedness. He claimed that the national debt is now over US$11bn, without including US$4.2bn in certificates issued by the central bank. Álvarez Bogaert, now an honorary professor at the Universidad Autónoma de Santo Domingo, argued that because unemployment in the country's two key export markets, the US and Spain, is so high, any economic recovery in 2010 would likely be modest.