5:16 16 April 2025
Inflation set to drop, with relief expected later in the year
Santander analysts predict a significant reduction in inflation, but the full relief will not come until mid-2025. March inflation was reported at 4.9% year-on-year, slightly above initial estimates. However, inflation is expected to fall to around 4.2-4.3% by April and continue decreasing, potentially dropping below 3.5% in July due to base effects from previous energy price hikes.
Santander forecasts rate cuts by the Monetary Policy Council, starting with a 50 basis point reduction in May. While food prices will rise moderately, they expect a significant easing of inflation in the second half of the year, with the annual food price increase slowing to around 3.0% by December.
