Honduras inflation slows to 5.58% in July but stays above official range

Honduras experienced a slowdown in its year-on-year inflation rate, which fell to 5.58% by the end of July, continuing a downward trend from the previous month's 5.83%. This marks the second consecutive monthly decrease, offering some relief from rising prices.

However, the inflation rate still exceeds the official tolerance range set by the Central Bank of Honduras (BCH), which is 4% with a one-point margin either way. The BCH attributed the moderating inflationary pressures partly to a more stable international context. Despite this, the prices of essential goods and services, including food, energy, transportation, and accommodation, remained the primary factors influencing the inflation rate over the past twelve months.

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more stable

The transport sector was the largest contributor to year-on-year inflation, accounting for 2.06 percentage points, though its impact lessened compared to June's 2.48 points. Other significant contributors included non-alcoholic beverages and food (1.31 points), housing, water, electricity, gas, and other fuels (0.90 points), and restaurants and accommodation services (0.59 points). Together, these categories explained 87.1% of the overall inflation.

For food prices specifically, the BCH cited a "lower national supply" of certain agricultural products. This was linked to crop losses and adverse weather conditions associated with the 'El Súper Niño' phenomenon, which negatively impacted crop productivity. In monthly terms, the Consumer Price Index (CPI) saw a 0.15% increase in July, the lowest in six months, while cumulative inflation from January to July reached 3.96%.

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lower national supply