Peru | Upward trend in year-on-year inflation breaks in January

The Consumer Price Index of Lima registered a variation of 0.04% MoM in January. This is mainly a result of the seasonal normalization of transport and some food prices after the end-of-year festivities.

Key points

• Key points:
• In YoY terms, inflation decreased to 5.7% in January (December: 6.4%) and the base was changed using a new survey that covers from June 2019 to March 2020.
• Inflation excluding food and energy, a trend measure of price changes, broke its previous ascending trajectory and went from 3.2% in December to 3.1% in January.
• We expect inflation to remain at high levels in the following months and close the year around 3.4%, above the target range of the Central Bank.
• This forecast considers that the increase in wholesale prices will continue to be passed on to consumers and that unanchored inflation expectations will generate some inertia in headline inflation.
• In this context, the Central Bank will probably continue to tighten the monetary policy stance in the following months.

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