2024-07-25 15:29:11
Monthly inflation for June 2024 in Ecuador showed a significant decline, standing at -0.95%, resulting in a reduction in annual inflation to 1.18% over the last 12 months. This figure marks the lowest monthly inflation since Ecuador adopted dollarization, surpassing the drop recorded in November 2019, which was -0.70%.
According to the National Institute of Statistics and Census (INEC), this decrease is partly attributed to the correction of prices after a significant increase in April 2024, caused by adjustments in VAT and the effects of power outages. Alberto Acosta Burneo, economic analyst, explained that the market has responded with adjustments in supply and demand, which has mitigated the initial impact on consumers and contributed to price stability in June.
Acosta also highlighted that sales have been affected due to weak consumption, which has led sellers to absorb part of the increases in April to maintain their transactions. This dynamic was reflected in regional variations, where cities such as Guayaquil (-1.37%), Manta (-1.25%) and Machala (-1.07%) experienced the largest price reductions between May and June 2024.
In terms of product categories, the largest price decreases were observed in accommodation and basic services, food and non-alcoholic beverages, recreation and culture, alcoholic beverages, as well as furniture and household items. Of the total products analysed in the Consumer Price Index, almost 58% are subject to Value Added Tax (VAT).
According to INEC, products subject to VAT showed a slight monthly variation of -0.01% in June 2024, while products without VAT registered a more pronounced variation of -1.79%. These data reflect the dynamics of economic and fiscal adjustment that has characterized the recent inflationary panorama in Ecuador.
By. Ecuador Live