Peru | Inflation surprised to the upside in the first month of the year

In January, the Consumer Price Index increased by 0,74%, more than anticipated by the market consensus. Food and fuel price increases stood out. With this result, YoY inflation reached 2,7%.

Key points

• Key points:
• The inflation component that excludes food and energy fell from 1,8% in December 2020 to 1,7% in January, thus remaining below 2,0% for almost a year.
• Our baseline scenario considers that in the following months YoY inflation will show a downwards correction. In this context, we estimate it will end 2021 between 1,5% and 2,0%.
• We believe that the Central Bank will keep having room to maintain a strongly expansionary monetary stance, thus supporting economic activity normalisation.

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