Macroeconomic Forecast Honduras

Inflation in Honduras continued to cool in September, according to central bank data, with the consumer price index (CPI) growing just 3.1% on a year-over-year measure, compared to 10.1% at the start of the year. Month-on-month growth was also moderate, at just 0.1%, a sign that slower domestic economic activity is feeding is helping ease price pressures on Honduran consumers. Given last year's base effects - CPI dropped from 13.1% y-o-y to just 10.8% in Q408 - we expect to see a slight uptick in headline inflation by year-end, to 3.2%, before rising to 6.0% by end-2010.

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