Macroeconomic Forecast El Salvador

BMI View: El Salvador's consumer price index showed the biggest jump in prices in a year in November, with month-on-month inflation coming in at 0.66%. This in turn saw year-on-year price growth rise to 2.8%, itself the highest level since March 2009, and a marked increase on the 1.4% y-o-y print in September. We attribute the rise to a spike in food prices rather than a spike in domestic demand, and hold to our forecast for inflation of 3.1% y-o-y and 4.2% y-o-y in 2010 and 2011 respectively.

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