New York, The consumer price index (CPI) for April 2024 is projected to rise to 17.6%, marking a 23-month low, and is expected to further expand the positive real interest rate (RIR) by an additional 310 basis points (bp).

According to JS Global, This report forecasts a decrease in month-over-month inflation by 20 bp, primarily due to lower food prices which are expected to offset increases in POL product prices and adjustments in quarterly house rent.

The analysis by JS Research suggests that the headline inflation reduction will lead to a significant increase in the RIR from 133 bp last month to 443 bp this month. The expansion of the RIR, combined with a current account surplus in March 2024, is setting the stage for potential monetary policy easing by the central bank. Despite the expected easing, there remains uncertainty regarding the timing and magnitude due to potential inflationary pressures from a new IMF program and ongoing volatility in global oil prices.

The research further anticipates a 100 bp cut in the policy rate at the upcoming Monetary Policy Statement (MPS), reflecting the central bank’s response to the evolving economic landscape.