Peru | Sharp decline in inflation in May and is located in the center of the target range

Summary

The consumer price index contracted 0.09% m/m in May. The reduction in food prices and electricity rates stood out. The interannual rate was 2.0% (2.4% in April) in the center of the Central Bank's target range.

Key points

• Key points:
• Core inflation, in year-on-year terms, stood at 3.1% (April: 3.0%), thus maintaining the resistance to yield that it has registered since the beginning of the year.
• We estimate that inflation will remain near the center of the target range until the third quarter of the year in an environment in which warm weather conditions have dissipated, inflation expectations are anchored within the target range, and the basis for interannual comparison is relatively favorable, and despite the fact that the activity will probably show a better performance than at the beginning of the year. In the last months of 2024, however, the year-on-year comparison base will decrease, meaning inflation would close the year slightly above 2.5%.

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