Peru. Inflation keeps high, curbing the Central Bank from increasing monetary policy ease in a significant way

Summary

The consumer price index rose 0,43% in July, somewhat more than expected (BBVA: 0,35%; Bloomberg consensus: 0,38%). This print reflects higher food prices and the transitory hike in transport fares that usually occurs during the national holidays. With this outcome, YoY inflation went down from 3,4% in June to 3,3%, still above the target range. In BBVA Research we keep expecting inflation will remain on average above the target in the coming months, ending the year around 3,3%. This reduces the room the Central Bank has in order to deliver an important monetary policy easing in a context in which output growth has gone down below 2%.

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