Peru | Inflation falls again in December and closes 2023 at 3.2% close to the target range

The consumer price index increased 0.41% MoM in December. The result for the month is explained by the seasonal increase in transportation prices and the prices of some foodstuffs, particularly poultry, also increased.

Key points

• Key points:
• The YoY rate was reduced from 3.6% in November to 3.2% in December, favored by a high interannual comparison base (inflation in December 2022 was 0.79% MoM).
• Core inflation, in year-on-year terms, fell to 2.9% (November: 3.1%), back in the target range of 2% +/- 1%.
• In our base scenario, we predict that inflation will experience some downward resistance at the beginning of 2024 as the weather anomalies associated with the El Niño phenomenon affect the supply of some goods during the first three months of the year.
• If the weather anomalies continue to weaken in the coming weeks and, consequently, their impact on the food supply is not very important, inflation in year-on-year terms could continue to decline at the beginning of the year, a scenario in which further cuts in the monetary policy rate would not surprise.

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