Peru | Inflation surprises to the upside and reaches 24-year maximum

Summary

The Consumer Price Index for the city of Lima increased 0.96% MoM in April. This is a result of the increase in the prices of food and non-alcoholic beverages and transportation, in a context of higher international prices of foodstuffs and fuels.

Key points

• Key points:
• In YoY terms, inflation accelerated in April, reaching 8.0% (March: 6.8%).
• Inflation excluding food and energy, a trend measure of price changes, drifted further away from the target range: it increased from 3.5% YoY in March to 3.8% in April.
• In the following months, we expect inflation to remain high due to the persistence of higher international prices for fuel and some foodstuffs because of the conflict in Europe.
• We maintain our inflation forecast of 5.0% for 2022 and expect the Central Bank will continue to tighten the monetary policy stance in the following months, hiking it by 50bp in May.

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