After a marked upswing in inflationary pressures in mid-2014, consumer price inflation has become negative, with 1.1% deflation year on year in October 2015 (the latest available figure) and a negative 0.3% average for January-October. We estimate that price pressures will remain contained in 2016 as lower average fuel, transport and communications costs continued to offset food price increases. Base-year effects will also push annual inflation back into positive territory this year. However, the extremely weak nature of the economic recovery will prevent a marked upturn in consumer demand in 2016-17 and, combined with still-modest international oil prices, this will result in average inflation rates of around 2%. Risks to this forecast stem from a possible sharp rebound in oil prices (which would quickly feed through to upward price pressures) and the risk of a sudden hiatus in Venezuelan tourism demand, but this does not form part of our central forecast scenario.