Peru | Inflation ends 2021 at 6.4%, the highest rate in 13 years

The Consumer Price Index of Lima registered a variation of 0.78% MoM in December. This is mainly a result of higher household fuel prices and the seasonal increase in the price of meat and transportation.

Key points

• Key points:
• In YoY terms, inflation increased again reaching 6.4% in December (November: 5.7%).
• Inflation excluding food and energy, a trend measure of price changes, has maintained an ascending trajectory and went from 2.9% in November to 3.2% in December.
• We expect inflation to remain at high levels in the following months, slightly above 6.5%, and above the target range of the Central Bank during the rest of the year, closing around 3.4%.
• 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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