Peru | Inflation surprises again due to higher international prices of inputs

Summary

The Consumer Price Index for the city of Lima increased 1.19% MoM in June. This is a result of the increase in the prices of transportation, food and restaurants and hospitality, in a context of higher international prices of fuels and agricultural inputs.

Key points

• Key points:
• In YoY terms, inflation accelerated in June, reaching 8.8% (May: 8.1%).
• Inflation excluding food and energy, a trend measure of price changes, accelerated also: it increased from 4.3% YoY in May to 5.0% in June.
• In the following months, we expect inflation to remain high due to higher and more persistent international prices for fuel and some foodstuffs because of the conflict in Europe.
• We now expect year-end inflation for 2022 closer to 7% and that the Central Bank will continue to tighten the monetary policy stance in July, hiking it by 50bp and then taking it above 7.0% before the end of the year.

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