Peru | Supply factors temporarily increase inflation

Summary

In March, the Consumer Price Index increased by 0,84%. With this outcome, inflation increased from 2,4% in February to 2,6% in year-on-year terms, mainly explained by supply factors.

Key points

• Key points:
• Inflation excluding food and energy increased from 1,6% in February to 1,8% in March.
• The jump in March’s price index is mainly explained by transitory supply factors that affected food prices and the seasonal increase in the cost of educational services.
• Both households spending weakness and an appreciation of the local currency in 2021 (particularly in the second half of the year) will result in YoY inflation decreasing.
• Our inflation forecast for this year is between 2,0% and 2,5%.

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