The Consumer Price Index (CPI), a key indicator of inflation in the Salvadoran economy, reached 2.11% in November, as reported by the Central Reserve Bank (BCR) on Thursday.
With the November figures, inflation has hit its lowest point since March 2021, marking a 31-month low. It’s a stark contrast to the rapid rise in inflation witnessed during that period when global supply chains were disrupted.
The November CPI showed a decrease of 0.55 percentage points from October, where it stood at 2.66%.
Of particular concern for Salvadorans is the inflation in the food and non-alcoholic beverages sector, which registered at 4.70%. However, this is the lowest rate since October 2021 and a notable decline from the peak reached in July 2022 at 14.37%.
The specter of deflation looms. The BCR calculates the CPI based on a basket of 238 products, comprising 196 goods and 42 services in high demand among Salvadorans, grouped into 12 categories.
According to the institution, three categories experienced deflation in November. Recreation and culture recorded -2.26%, communications had a deflation of -2.10%, transportation closed with -0.13%, and the furniture and household items section reached -1.08%.
In an interview last October, Mauricio Choussy, an economic analyst and former president of the BCR, reminded viewers that current inflation levels are not comparable to those during the 1980s armed conflict when rates reached 31%.
Besides the conflict, El Salvador was grappling with a deep economic crisis in the Latin American region during the «Lost Decade of Latin America.» People received their salaries and immediately made purchases because of the extreme price volatility, a stark contrast to the current economic landscape.