Macroeconomic Forecast HondurasSeptember 2012 | Macroeconomic Forecasts
We are revising down Honduras’ 2012 average inflation forecast, from 6.4% to 5.1% in line with our call for further monetary tightening. The central bank has already tightened the policy rate by 250 basis points (bps) over the past year in a bid to protect the currency from modest capital flight pressures and the country’s poor trade dynamics. However, while the tightening cycle is nearing its end, we see potential for one more hike, forecasting the policy rate will rise from 7.00% to 7.50% by year-end. As such, with demand side pressures likely to continue falling off, we see inflation as likely to remain more subdued in coming months.
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