Fifteen months after the beginning of the health and economic crisis, Guatemala, Honduras and Nicaragua are the economies in the region with the highest inflation rates, a behavior that was influenced by increases in fuel and transportation costs.
In the second quarter of 2020, a period in which the countries of the region were going through a severe economic crisis caused by the Covid-19 outbreak, inflation levels were low and in some economies negative variations were reported.
Discounts and offers, increase in the price level generally and the rise in operating costs due to new health and safety protocols are the main threats to the profitability of companies in this new commercial reality.
Given this context of economic and health crisis, which derives from the outbreak of covid-19 at the global level, Ariel Baños, a specialist in price management and founder of Fijaciondeprecios.com, explains what are the main threats that could affect the profitability levels of companies, and details some strategies that could be applied to mitigate the adverse effects.
During the second month of the year, the Consumer Price Index registered a 3.99% year-on-year variation, a rise that was determined in part by the behavior of the prices of education services, hotels and restaurants.
From the Central Bank of Honduras report:
The monthly behavior of the CPI was determined by the contribution of the item "Education" with 0.51 percentage points (pp), together with the items "Recreation and Culture" and "Hotels, Cafes and Restaurants" with 0.04 pp, each. On the contrary, "Transportation" contributed -0.18 pp to the monthly inflation.
After the inflationary rhythm went from 3.8% to 4.1% between November and December 2019, during January 2020 the year-on-year CPI was 4.3%.
In the first month of 2020, the monthly variation of the Consumer Price Index (CPI) was 0.24% (0.03% in January 2019), an increase driven by the rise in the price of services related to housing, some food and recreational and cultural items and services.
The variation in the price of some foods of agricultural origin, transport and health, determined the 4.08% year-on-year increase in the CPI reported in December last year.
In December 2019, the Consumer Price Index (CPI) showed a 0.42% variation (0.19% in December 2018), reflecting the price increase in some foods of agricultural origin, transport and health.
During November, the CPI in Honduras registered a 3.8% variation with respect to the same month in 2018, an inflationary rhythm lower than the 4.1% rate reported in October.
The monthly variation of the Consumer Price Index (CPI) was 0.30% in November 2019, lower than that recorded in the same month of 2018 and 2017 (0.53% and 0.49%, in order), the increase in the index reflects the rise in prices in some food products and fuels, reported the Central Bank of Honduras (BCH).
During October 2019, the CPI registered a 4.1% variation with respect to the same month in 2018, an inflation rate that is lower than the 4.4% reported in September.
In October 2019, monthly inflation -measured through the variation of the Consumer Price Index (CPI)- was 0.24%, lower than the registered in October 2018 (0.56%). The monthly result is mainly the result of the increase in the price of some food products and fuel, informed the Central Bank of Honduras.
During the ninth month of the year, the CPI registered a 4.4% variation with respect to September 2018, being health services and housing rentals, the items that registered the most important increases.
In September 2019, monthly inflation -measured through the variation of the Consumer Price Index (CPI)- was 0.15%. The Central Bank of Honduras reported that the above is explained by the increase in the prices of rental housing and some services for its maintenance, medicines and health services, counteracted by the reduction in the prices of fuels and some food products.
During August, the inflationary rhythm was reduced for the third consecutive month, falling to 4.29%, which is explained by the behavior of the prices of Food and non-alcoholic beverages.
The monthly variation of the Consumer Price Index (CPI) was 0.06% in August 2019, lower than that observed in the same month of the previous year (0.44%), a result mainly because of the reduction in the prices of some foodstuffs, which was compensated by increases in the rent of housing, some medicines and health services, informed the Central Bank of Honduras (BCH).
Food and Non-Alcoholic Beverages was the expenditure item that most contributed to the 4.7% year-on-year variation reported during the seventh month of the year.
From the Central Bank of Honduras report:
In July 2019, the monthly variation of the Consumer Price Index (CPI) was 0.27%, lower than the observed twelve months ago (0.38%); the monthly result is mainly due to the increase in the prices of some foods, personal care items and medicines.
Between May and June of this year, the inflation rate in Honduras decreased from 5.1% to 4.8%, mainly because of variations in transport prices.
The monthly variation of the Consumer Price Index (CPI), in June 2019, was 0.09%, lower than the observed twelve months ago (0.41%) and the lowest for this month since 2012, informed the Central Bank of Honduras (BCH).
In the sixth month of the year, the FAO food price index increased by 1% compared to the same month in 2018, explained by the increase in the prices of cereals, meat and sugar.
From FAO's monthly report:
The FAO Food Price Index* (FFPI) averaged 173 points in June 2019, down marginally (0.3 percent) from May and very close to its level in June 2018.
Between April and May of this year, the inflationary rhythm grew from 4.9% to 5.1%, mainly because of variations in the prices of fuels, some services and certain foods.
From the Central Bank of Honduras report:
The items with the highest contribution to monthly inflation were: "Housing, Water, Electricity, Gas and Other Fuels" with 0.09 percentage points (pp); followed by "Transport" and "Food and Non-Alcoholic Beverages" with 0.08 pp, each and "Clothing and Footwear" with 0.04 pp (together contributing 80.6% to monthly inflation). Likewise, the groups "Personal Care" and "Furniture and Household Maintenance Items" each contributed less, with 0.02 pp, and "Health", "Recreation and Culture" and "Hotels, Cafeterias and Restaurants" with 0.01 pp, each.
Reported prices for electricity, fuel, some household items and clothing caused much of the monthly change in the CPI recorded in the third month of the year.
From the Central Bank of Honduras report:
In March 2019, the monthly growth of the Consumer Price Index (CPI) was 0.40%, mainly because of the increase in the prices of electricity supply, fuel, some household items and clothing.
The prices reported in the categories of Education, and Food and alcoholic beverages, largely explained the monthly variation of the CPI recorded in the second month of the year.
From the Central Bank of Honduras report:
The monthly growth of the Consumer Price Index (CPI) in February 2019 was 0.77%, influenced mainly by the increase in the price of school fees at different levels of private education, as well as the higher price of some food and fuel. As a result, year-on-year inflation stood at 4.09% (4.33% twelve months ago), and accumulated inflation at 0.80%.