The inflation rate came in at 3.7% in December, up from 3.6% in November. Looking at the details of the release, restaurant and hotel prices accelerated at a sharper pace. In contrast, the change in transportation prices, as well as for food and non-alcoholic beverages, was broadly stable from the previous month’s reading. Meanwhile, prices for clothing and shoes have been contracting at an even more noticeable pace.
Accordingly, average annual inflation rose to 3.5% in December (November: 3.3%).
Finally, consumer prices rose 0.16% from the previous month in December, reversing from a 0.01% decline in November.
Analysts at EIU commented on the outlook:
Our central forecast assumes that 12-month consumer price inflation will gradually slow [in 2023]to reach 1.5% by the end of 2023. The supply-side pressures that have built up during 2022 will eventually begin to ease as demand in the global economy eases and supply chains reform. However, global commodity markets will remain particularly sensitive to one-off shocks in large producers, such as droughts, floods or natural disasters, the effects of which can quickly spill over into the local economy.”
FocusEconomics panelists see inflation ending 2023 at 2.1%, up 0.1 percentage point from last month’s forecast. For 2024, they expect year-end inflation to be 1.8%.