El Salvador’s inflation rate dropped to 0.58% in September, marking its lowest point since January 2021, according to a report released by the Central Reserve Bank (BCR). This represents a sharp decline from the 1.17% inflation rate recorded in August.
The Consumer Price Index (CPI), which tracks the cost of a basket of 238 essential goods and services, fell by nearly half in September. The last time inflation reached such low levels was in January 2021, when it stood at 0.31%.
After peaking above 7% in mid-2022, inflation saw steady declines throughout 2023, dipping to 0.77% by March 2024. However, from April to July, the trend reversed with inflation climbing to 1.78% in July, before retreating again to 1.17% in August and further to 0.58% in September.
Despite the slowdown, economists clarify that prices are still rising, but at a slower pace. The BCR forecasts that inflation will end 2024 between 1% and 1.5%, below its target rate.
Among the categories measured by the CPI, deflation was observed in four sectors: furniture and household items (-1.69%), transportation (-4.29%), communications (-0.94%), and recreation and culture (-1.95%). On the other hand, food and non-alcoholic beverages saw a significant decrease in inflation, from 3.12% in August to 1.21% in September, the lowest rate since July 2021.
Other sectors such as clothing and footwear (0.75%) and restaurants and hotels (5.35%) also saw reductions. However, certain categories, including miscellaneous goods and services (1.14%), healthcare (2.38%), and housing, water, and electricity (1.15%), experienced slight increases.
While the inflation rate has slowed considerably, the report highlights a continued trend of price increases across various sectors, albeit at a more moderate pace.