Peru | Sharp inflation hike in July

Summary

Inflation rose 1,01% m/m in July (market consensus: +0,46%). The impact of the increase in the international prices of food and fuels, the depreciation of the local currency, and some supply restraints explain this month's inflation

Key points

• Key points:
• With this result, inflation in year-on-year terms increased from 3.3% in June to 3.8% in July
• Inflation excluding food and energy, a more trending measure of the pace at which prices are increasing, increased from 1.9% in June to 2.1% in July
• An important element in order to anticipate the inflationary trend in the coming months is to assess to what extent the higher international prices of food inputs and oil, as well as the rise in the exchange rate, have already been transferred to the prices of goods and final services
• It is interesting to note that as of June the three-month expectation indicators for the average sale price and for the average price of inputs published by the BCRP have an upward trend: more and more companies expect higher costs and upward readjustments in their final prices in the months to come
• In our baseline forecast scenario, we anticipate that inflation will close the year between 3.0% and 3.5%

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