Peru | Inflation outside the target range: highest monthly variation in 32 years

Summary

Inflation in Lima Metropolitana registered a historical increase of 2.38% month-over-month in March. This increase, the largest in 32 years, raised the year-over-year rate to 3.8%, surpassing the upper limit of the Central Bank's target range due to climate and energy factors.

Key points

• Key points:
• The temporary rupture of the Camisea gas pipeline and tensions in the Middle East triggered a 9.1% monthly increase in transport prices, increasing the cost of fuels such as vehicular LPG and urban transit fares.
• Core inflation, which excludes food and energy, rebounded by 2.07% monthly due to the rapid pass-through of higher logistics and transportation costs to the services of the economy.
• Climate anomalies, characterized by frosts and rains in the central highlands, negatively impacted agricultural production and put upward pressure on the prices of vegetables, tubers, and fruits.
• The Central Bank is expected to maintain its monetary policy rate at 4.25% at the April meeting, paying special attention to the evolution of inflation expectations.

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