Macroeconomic Forecast Honduras

May 2007 | Macroeconomic Forecasts

BMI View: We had anticipated a rise in inflation to 5.5% by year-end, from 5.3% last year, but recent data indicate that the risks to this forecast are firmly to the upside. The 6.3% y-o-y reading for March was the highest since February 2006. As with other countries in Central America, there has been significant upward supply-side price pressure from higher food costs in recent months, in part because of higher corn prices globally. Indeed, the Honduran food price basket rose by 9.2% y-o-y in March, its fastest pace since October 2005. Unless these external price pressures abate, inflation could

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