El Salvador has experienced a continued decline in inflation, with a rate of 4.41% in May. This marks the ninth consecutive month of decreasing inflation since August 2022, resulting in a decrease of 3.25% overall.
According to the latest report from the Central Reserve Bank (BCR), inflation decreased by 1.03 percentage points between April, when it stood at 5.44%, and May, when it reached 4.41%.
The statistics reveal a significant reversal in the trend, as inflation had reached its peak in June 2022 at 7.76%. Since then, it has steadily declined, with a decrease of 3.25% from August of last year, when it was at 7.66%, until the recent month of May.
At the end of last year, the BCR projected that El Salvador’s inflation rate would normalize and return to around 3% in 2023.
Furthermore, the 4.41% rate reported the previous month is below the country’s inflation rate in September 2021 when the BCR recorded a rate of 4.97%, and slightly above August, which had an index of 4.30%.
On a regional scale, El Salvador continues to be one of the least affected countries by the rising prices, ranking second after Costa Rica, which reported an inflation rate of 0.88% in the fifth month of this year.
Meanwhile, Honduras and Guatemala have also seen a decline in inflation, registering rates of 6.6% and 6.5% respectively. In contrast, Nicaragua has struggled to stabilize its economy, reporting a 9.53% inflation rate in May.
THE 11 MEASURES
In response to the international inflationary surge, which intensified in March 2022 following the outbreak of the war between Russia and Ukraine, President Nayib Bukele implemented 11 measures in El Salvador. These measures aimed to address the impact on global trade of food, fertilizers, and agricultural supplies.
Among the directives, temporary tax exemptions on food imports and agricultural supplies were introduced. Additionally, temporary price controls were implemented for fuel, liquefied petroleum gas (LPG), and electricity. The government also deployed nationwide inspections on all participants in the supply chain to prevent hoarding and unjustified price increases.
Ricardo Salazar, the president of the Consumer Protection Agency, stated this week that since March 2022, 189,431 price inspections have been conducted. These actions have resulted in 124 complaints filed with the Consumer Protection Agency’s Sanctioning Tribunal, leading to the imposition of 50 fines totaling $201,000.