Ecuador: Consumer prices decline in April
Latest reading: Consumer prices declined 0.7% on an annual basis in April, swinging from March’s 0.3% rise and marking the largest fall since June 2021. The drop was mainly driven by lower food costs due to a high base effect created by a VAT hike in April 2024, and softer price pressures for transportation amid lower oil prices. That said, electricity subsidies expired at the end of March, causing housing and utilities costs to fall at a milder pace, limiting the headline drop.
Accordingly, the trend pointed down mildly, with annual average inflation coming in at 1.0% in April (March: 1.2%).
Lastly, consumer prices increased 0.27% in April over the previous month, below March’s 0.35% rise.
Panelist insight: Commenting on the outlook, EIU analysts stated:
“The continued liberalisation of fuel prices will exert some additional upward price pressures, although the decline in global oil prices will partly offset these. Global commodity price shocks, protectionist measures by the Trump administration or weather-related disruptions to the domestic economy could push inflation above our forecast, as could a faster than expected recovery of weak domestic demand.”