Average inflation in Honduras

Average annual inflation measures the mean rise in Honduran consumer prices over a year, calculated as the average of the twelve monthly inflation rates. It condenses the year's inflationary pressure into a single figure.

It builds on the consumer price index (CPI) compiled by the Central Bank of Honduras (BCH) together with the statistics institute, from a regular price survey. The annual average compares the year's mean index with the previous year's, unlike end-of-period inflation; long-run series usually come from the IMF.

Inflation erodes Honduran households' purchasing power and is the Central Bank of Honduras's reference for monetary and exchange-rate policy. A high print shapes rates and the pace of the lempira's crawl, which is very sensitive to imported food and fuel prices.

Being a yearly average, it smooths peaks and troughs and lags behind end-of-period year-on-year inflation. It only captures the prices in the defined basket, and for the underlying trend it is worth watching core inflation, which strips out energy and unprocessed food.