Ecuador witnesses decline in year-on-year inflation in May, settles at 1.97%

Ecuador’s inflation rate in May 2023 exhibited a marginal rise over April, resulting in a monthly inflation rate of 0.09%.

In comparison, the year-on-year inflation for May stood at 1.97%, significantly lower than the 3.38% recorded in the same month of 2022. This marks the lowest annual inflation since the close of 2021.

As for cumulative inflation was 0.49% in May 2023, up from 0.40% in the previous month and far below the 2.24% recorded in May 2022.

The Basic Family Basket (CFB), a key economic indicator, was valued at US$ 766.73 in the year’s fifth month.

INEC reports indicate that the three categories contributing most to May 2023’s monthly inflation were Food and non-alcoholic beverages (0.0546%), Health (0.0168%), and Furniture, household goods, and articles for ordinary household maintenance (0.0139%).

The inflation influencers within these categories included

• rice, table cheese, bell pepper, and coriander in food;
• mineral supplements, vitamins, anti-anemia preparations, hospitalization expenses, and ophthalmologic products in health; and
• chlorine, disinfectant, bedroom sets, and air conditioners in the household segment.

REGIONAL INFLATION IN ECUADOR FOR MAY 2023

According to INEC, coastal cities (0.21%) experienced higher monthly variations compared to the highland cities (-0.05%).

However, highland cities (2.01%) showed higher annual variations than their coastal counterparts (1.93%).

Manta, Santo Domingo, Esmeraldas, and Guayaquil exhibited the highest monthly variation, while Quito, Santo Domingo, Esmeraldas, Guayaquil, and Manta reported the highest annual variation, surpassing the national annual variation.

In May 2023, the Basic Family Basket (CFA) was valued at US$ 766.73, according to INEC. For a typical Ecuadorian family (composed of 4 members with 1.6 earners receiving a unified basic wage), the average monthly family income was US$ 840.

Thus, the average family income covers 109.56% of the total cost of the basic family basket, indicating a -0.08% decrease from the previous month.

Regionally, the Basic Family Basket costs US$ 779.07 in the highland region and US$ 754.38 on the coast, with Cuenca having the highest basic basket value of US$ 796.10.

The basic food basket was priced at US$ 538.61, resulting in a surplus of US$ 301.38 for the average household income.

Compared to the previous month, the cost of the vital basket saw a decrease of -0.40%, according to INEC.

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