Peru | Inflation closed 2024 in the center of the Central Bank's target range

Summary

The consumer price index increased 0.11% m/m in December. The month’s result is explained by the seasonal increase in transportation prices, while on the other hand food prices decreased. The year-on-year inflation rate was 2.0% in December (center of the BCRP target range).

Key points

• Key points:
• The year-on-year inflation rate was 2.0% in December (November: 2.3%), closing the year in the center of the Central Bank's inflation target range (2% +/- one percentage point). It is worth mentioning that inflation has not closed the year within the target range since 2020.
• The component of the consumption basket that excludes food and energy, a more trend measure of the pace at which prices advance, increased 0.40% m/m in December, so that in year-on-year terms it showed a variation of 2.6%, similar to that of the previous month.
• At BBVA Research we estimate that inflation will remain not far from the center of the target range during the first quarter of the year, in an environment of relatively normal weather conditions (according to the forecasts of specialized entities) in terms of their macroeconomic impacts, slack in the economy that is nearly closed, and anchored inflation expectations.
• We forecast that inflation will end the year around 2.5%, which incorporates the effect of a low year-on-year comparison base towards the last months of 2025.

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