Inflation deceleration and Risks to economic recovery.
The quarterly report from the Executive Secretary of the Central American Monetary Council (SECMCA) focuses on the region's inflation and recovery prospects.
Inflation, measured by year-on-year change in consumer prices, slowed in the second quarter of 2010 to 4.9%, compared to 2.9% in June 2009.
After showing constant growth during 2007 and 2008, inflation indexes slowed down considerably in the second half of 2009.
The Executive Secretary of the Central American Monetary Council presented its 30th Regional Economic Update. In it, they calculate how much inflation was indirectly imported by the Central American countries.
The Central Bank estimates the country's economy to grow between 1.5% to 2% in 2010, and inflation to fall between 3% to 5%.
Antenor Rosales, president of the Central Bank of Nicaragua, explained that this growth estimate is based on the expected recovery of the global economy, an increase in remittances, exports and foreign direct investment.
Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.
The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.
Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.
The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.
Economists calculate that the general rise in prices was between 14.8 and 15.3% at the end of 2008.
According to laprensa.com.ni, "As of November, according to the most recent data from the BCN, inflation was at 14.04% due mainly to the increase in the price of food and beverages (tomatoes, peppers, potatoes, cabbage, cheese and eggs); home furnishing and maintenance (domestic salary, furniture, detergent and clothing), and other good and services (cigarettes, bath soap, toilet paper)."
While interannual inflation showed a strong reduction in November in the rate of growth, the accumulated inflation had a slight growth going from 13.95 to 14.04% during the first 11 months of the year.
The latest report from the Central Bank of Nicaragua issued yesterday on its web page indicates that in November monthly inflation grew slightly by 0.08% for the accumulated rate, after having fallen in October by 0.02% to remain at 13.95%.
According to the latest report on inflation published by the BCN, at the end of October the accumulated inflation was at 13.95% compared to 10.71% in 2007.
The institution explain that the downward trend in inflation continues, and that for the first time this year there was a slight decrease of 0.02%.
The consumer price index fell 0.02% in October, even though the accumulated rate for the year is at 13.95%, according to figures from the BCN released on Monday.
The inflation rate continued the "downward trend" with a slight decrease recorded for the first time this year due to the drop in the price of fuels both for vehicular and home use. This is related to the drop in the international price of petroleum, the report indicated.
Interannual inflation was at 22.79% in September due to the rise in the price of fuel and basic grains in the international market, official sources reported.
The Central Bank of Nicaragua (BCN) pointed out in its monthly report that inflation for September closed at 0.21 percent, while the accumulated inflation for the first nine months of the years totaled 13.97% and the interannual inflation was 22.79%.
This figure is more than double the inflation for the same period last year, when it closed at 9.86%.
The latest report form the Central Bank show that accumulated inflation, that is the general rise in prices, for August was at 13.73% just as the president of the Bank, Antenor Rosales, had previously announced on Wednesday.
Adolfo Acevedo, an economics expert, indicated that accumulated annual inflation decreased 14.2%, mainly due to the reduction in oil prices.
Acevedo said that according to projection model for the inflation rate, the fastest speed in the increase of prices in the economy occurred in the first semester of the year and will now continue to grow but at a slower speed. The expert points out that the percentages proposed are only averages, and that the panorama change change at any moment, although the hope is that if it occurs it will be slight. So then, projections estimated up to the end of year, reveal that the inflation rate will be between 18.6% and 20%.
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