Macroeconomic Forecast Honduras

Honduran inflation continued to creep lower in June, easing to a two-and-a-half year nadir of 5.4% y-o-y. We would expect to see a slight uptick in July's month-on-month data, as the partial blockage of borders impacts upon imported prices. Nevertheless, we are confident that headline price growth will fall towards our 5.0% target by end-2009, as recessionary forces continue to dominate. In 2010, we see a slight uptick in inflationary pressures, but with the economic recovery likely to be gradual, we are still projecting a relatively mild end-2010 CPI rate of 6.0%.

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