Estudios Técnicos: Keeping track of the risk of inflation in Puerto Rico
The fear of an inflationary wave in the United States has implications for Puerto Rico, precisely because the island’s prices are largely determined by what happens stateside.
Puerto Rico’s inflation rate has been rebounding since October 2020, although during the first quarter of 2021, the Consumer Price Index (CPI) remained at a rate slightly below the same quarter in 2020.
Furthermore, increases in the price of food and beverages have contributed significantly to the CPI. During the first quarter of 2021, the CPI increased at an average annual rate of 0.5%, while the food and beverage sub-index increased by 1.4%, according to the findings in a study released by analysis firm Estudios Técnicos.
In March, the main drivers of the CPI’s increase were fuel, mail, and delivery and information services, and clothing and accessories.
However, the CPI still remains below the historical levels reported during the years 2005-2008, when it increased an average of 5.1%.
“Although the upward trends are clear, these may simply be due to the recovery process after the pandemic in sectors such as residential construction,” according to the study, which mentioned that the prices of construction materials, which are not included in the CPI, have had notable increases as a result of global trends and in the United States.
“Some analysts in the United States have stated that the rise does not necessarily suggest that there is a long-term inflationary trend. However, the increase in prices will impact Puerto Rico,” the Estudios Técnicos analysis concluded.