Macroeconomic Forecast Puerto Rico

We forecast inflation to slow in 2012 as we expect a moderation of oil prices from US$101.90/bbl in 2011 to US$95.0/bbl in 2012. Indeed, transportation prices -which are largely driven by oil prices-, rose by 7.8% y-o-y in July, which is twice as fast as domestic prices as the general price increase of 3.4% y-o-y in Puerto Rico. Furthermore, we forecast sluggish economic growth over the period which is unlikely to cause inflationary pressures.

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