Bloomberg Línea — After the scare generated in 2022, inflation in Latin America has been cooling gradually but consistently in almost all countries. In fact, in May only three countries showed a higher consumer price index (CPI) than during the previous month.
In the fifth month of the year, Panama was once again the country with the lowest inflation in the region, followed by Costa Rica and Ecuador.
Meanwhile, Brazil, the largest economic power in the region, continues to see inflation decelerate, to the point that it closed May with a CPI of 3.94% year on year, leaving behind the double digits of 2022 when, in May of that year, inflation topped 12.13%. Today it is the fifth country in Latin America with the lowest inflation, but which would drop to seventh place if Puerto Rico and Guyana were included in the ranking.
The region’s second-largest economy, Mexico, has also been winning the fight, albeit more slowly.
Mexico’s inflation stood at 5.84% in May, after the CPI had hit 8.7% year on year in September and October 2022. From there, it began to decline. Mexico is now the eighth country with the lowest inflation in the region, surpassed by the aforementioned countries plus El Salvador, Dominican Republic and Paraguay.
Inflation in Latin America, from lowest to highest
- Panama once again ranked as the country with the lowest inflation in Latin America: 0.4% year-on-year. In April it had 0.95%. In the fifth month of the year, prices in Panama rose only 0.2% with respect to April
- Costa Rica ended May as the country with the second lowest inflation in the continent. The year-on-year rate was 0.88%. This country chained its fourth month with negative monthly inflation (-0.11% in May) and so far in 2023 accumulates negative inflation: -1.36%
- Ecuador closed May with monthly inflation of 0.09%, bringing the year-on-year variation to 1.97%
- Brazil, as mentioned, closed May with 3.94% year-on-year inflation, after closing the month with a price increase of 0.23% with respect to April
- El Salvador has also seen falling inflation: it stood at 4.41% year-on-year in May (one point less than in April). In the monthly comparison, the CPI was negative (-0.07%)
- Dominican Republic’s May inflation was 4.43% y-o-y (-0.2% monthly)
- Paraguay’s year-on-year inflation was 5.1% in May (0% monthly variation)
- Mexico, as mentioned above, closed May with a year-on-year inflation rate of 5.84%, after posting a negative monthly CPI (-0.22%).
- Guatemala’s year-on-year inflation was 6.54% in May (a significant drop from 8.32% in April). A comparison of May 2023 with the previous month shows a variation of -0.36%.
- Honduras closed May with a year-on-year inflation rate of 6.58%. Prices rose 0.07% with respect to April
- Uruguay ended May with year-on-year inflation of 7.1%. The Rio de la Plata country also posted a negative record with respect to April (-0.01%)
- Peru’s inflation in May was 7.99% y-o-y and the monthly figure showed a 0.31% increase in prices
- Chile has been having a hard time lowering inflation, but it is gradually achieving it. The year-on-year increase in May was 8.99% year-on-year (0.1% monthly)
- Nicaragua’s May inflation was 0.59% monthly and the year-on-year rate was 9.47%
- Colombia has been struggling to lower inflation, but in May it took a small step in the right direction: the year-on-year figure was 12.36% (just below April’s 12.82%). Prices grew 0.43% in the monthly comparison
- Argentina consolidates its position with the world’s third-highest inflation, behind Venezuela and Lebanon. In May, Argentina’s inflation was 114.2% year-on-year. Even so, the government pointed out that the monthly figure closed at 7.8%, which means a lower value compared to 8.4% in April
- Venezuela, the country with the highest inflation in the world, has not yet published the CPI for May. However, the measurement of the Venezuelan Observatory of Finance showed a price increase of 458% year on year (7.6% monthly).
Only in Argentina, Bolivia and Venezuela was the year-on-year inflation figure higher in May than in April.