Peru | Year-on-year inflation accelerates again in February

Summary

The Consumer Price Index for the city of Lima increased 0.31% MoM in February. This is mainly a result of the increase in the prices of recreation and culture, and restaurants and hospitality, in a context of greater mobility given the reversal in the contagions associated with the third wave of COVID-19.

Key points

• Key points:
• In YoY terms, inflation accelerated again in February, standing at 6.1% (January: 5.7%).
• Inflation excluding food and energy, a trend measure of price changes, also accelerated, albeit more modestly: we estimate it went 3.1% YoY in January to 3.3% in February.
• In the next months, we expect an acceleration in inflation due to lagged price adjustments (in particular, educational costs in March), and in response to higher international prices for fuel and some foodstuffs because of the conflict in Europe.
• For year-end 2022, we maintain the forecast of inflation around 3.4%.
• In this context, the Central Bank will probably continue to tighten the monetary policy stance in the following months, taking the policy rate to 4.50%.

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