Inflation holds steady in May

Latest reading: Inflation held steady at April's 1.7% in May, remaining close to the midpoint of the Central Bank’s 1.0–3.0% inflation target range. Looking at the details of the release, transport plus housing and utilities price growth moderated, offsetting a sharper increase in food and beverages costs. The trend was unchanged, with annual average inflation coming in at April's 1.9% in May. Finally, consumer prices fell 0.06% in May over the previous month, contrasting April's 0.32% increase. May's result marked the weakest reading since January.

Panelist insight: On the implications for monetary policy, Santiago Tellez, analyst at Goldman Sachs, stated: “Firmly anchored within the target band, we see year-on-year headline inflation rising moderately in upcoming months on adverse base effects, ending 2025 at 2.3%. The inflation outlook remains benign and does not constitute an impediment to the delivery of at least another 25bp rate cut, which instead will likely be constrained by the external backdrop.”

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