The economic recovery in Latin America is well underway but, in most countries at least, there is little evidence of a build-up in price pressures. Indeed, headline inflation fell in Mexico, Colombia and Peru in December, while Chile remains in deflation. A number of one-off factors mean that inflation is likely to pick up over the course of this year. Food and energy inflation is likely to accelerate, while some countries, notably Mexico, have hiked indirect taxes. But for the most part, core pressures should remain subdued. The exceptions are Brazil, where the recession was shallow and the rebound has been strong, and Venezuela, where inflation is more entrenched and the recent devaluation of the bolivar will drive up import prices.