Why is inflation falling, yet households still aren't feeling the effects?
Lower-income households in Paraguay are not feeling the relief from the low overall inflation rate of 2.7% because the BCP’s macroeconomic figures mask the reality faced by vulnerable families. Low-income families spend between 55% and 65% of their income on basic necessities with very inelastic prices. While overall inflation is falling, the food and beverage subindex is adjusting much more slowly.