Macroeconomic Forecast Honduras

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Honduran consumer price inflation continues to accelerate, hitting an eight-year high of 12.2% y-o-y in June. As with much of the region, Honduras is reliant on expensive fuel and food imports from abroad, and has been hit hard by rising global prices. Petro-relief from Venezuela should help to soothe inflationary pressures in H208, as should the recent softening of global commodity prices. That said, we have recently revised up our end-2008 inflation target to 9.0% (from 7.5% previously) to reflect the growing risks.