Peru | Inflation remains below the center of the target range

Summary

In September, the Lima Consumer Price Index rose 0.14% MoM (Bloomberg Consensus: 0.02%; BBVA Research: 0.17%). With this result, inflation in YoY terms increased from 1.7% in August to 1.8% in September.

Key points

• Key points:
• The September result stems from a rise in fuel prices, a readjustment in electricity rates and an increase in food and beverage prices.
• The component of inflation that excludes food and energy, a trend measure, remained at 1.8% in August.
• It should be noted that from April to September the monthly average of inflation excluding food and energy has been 0.1%, which is equivalent to approximately 1.0% in annualized terms. In September, with the exception of the Rest of Services and Health consumption groups, all the components of inflation excluding food and energy registered very low or negative price increases.
• Looking ahead, we maintain our forecast of a decline in inflation to levels closer to 1.0%. This forecast takes into account: (i) the recent evolution of the trend components of inflation, (ii) one-year inflation expectations that remain firmly anchored below 2.0%, and (iii) a scenario of weak internal demand and significant slack in productive capacity.

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