Peru | The price level begins the year with a decline and surprises the market

Summary

The consumer price index contracted 0.09% m/m in January. The result for the month is mainly explained by the seasonal normalization after the end of the year holidays (price of poultry products and transportation rates). The interannual inflation rate was 1.9% in January.

Key points

• Key points:
• The interannual inflation rate stood at 1.9% in December (December: 2.0%), and thus remains close to the center of the Central Bank's target range (2%, +/- one percentage point).
• The component of the consumer basket that excludes food and energy, a more trendy measure of the pace at which prices advance, fell 0.15% m/m in January, so that in year-on-year terms it showed a variation of 2 .4%, a level not very different from its historical average.
• January's reading also surprised us on the downside. That is why the forecast we have for the coming months has a downward bias, especially for the very short term. Going forward, in an environment in which inflationary expectations are anchored, the output gap has closed, no weather anomalies with macroeconomic impact are anticipated, but in which there is also a low base of year-on-year comparison in recent months. of the year, we estimate that inflation will end 2025 at around 2.5%.

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