Bloomberg News

Ecuador Inflation Climbs Most Since April on Leisure Costs

July 05, 2012

Ecuadorean consumer prices rose the most in two months in June while producer prices declined for the first time since February, the National Statistics and Census Institute said.

Living costs climbed 0.18 percent from the previous month and increased 5 percent from a year earlier, the agency said in a report on its website. Producer prices declined 2.38 percent from May and rose 3.08 percent from June 2011, the report said.

Ecuador’s economy in the first quarter posted its weakest growth in two years as above-average rainfall damaged crops, washed out roads and disrupted supply chains, spurring the highest inflation in three years. Since then, price increases have slowed as the rainy season ended and the global cost of raw materials dropped to their lowest levels in nine months, according to data compiled by Bloomberg.

The biggest monthly increase in consumer prices was a 1.72 percent jump in the cost of recreational and cultural activities, while transportation prices fell 0.1 percent, the report said.

Among producer prices, agriculture costs fell the most, dropping 7.7 percent, while electricity, gas and water decreased 4.46 percent, the agency said.

Consumer prices rose most in the highland city of Ambato, jumping 1.35 percent. In Guayaquil, the nation’s largest city, the cost of living rose 0.27 percent, the agency said. Ecuador, the smallest member of the Organization of Petroleum Exporting Countries, subsidizes fuel costs and the domestic use of natural gas.

Consumer price increases are forecast to average 5.14 percent this year compared with 4.47 percent in 2011 while the economy may expand 5.35 percent, according to the Finance Ministry’s 2012 budget.

To contact the reporter on this story: Nathan Gill in New York at ngill4@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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