Peru | The year-on-year rate of inflation rose again in January, but less than expected

Summary

The Lima Consumer Price Index increased 0.23% in then month of January. This was mainly due to the increase in food prices, partially offset by lower gasohol and interprovincial transportation prices.

Key points

• Key points:
• The year-on-year inflation rate rose to 8.7% in January (December: 8.5%).
• On the other hand, core inflation (which excludes food and energy prices), a more trend measure of the pace at which prices rise, stood at 0.05% in January (December 2022: 0.54%). This inflation indicator increased in year-on-year terms, from 5.6% in December 2022 to 5.8% in January.
• At BBVA Research we estimate that year-on-year inflation will continue to print at high levels in the short term, even above 8.0%.
• Also taking into account that inflationary expectations for 2023 are above 4% (and 3% for 2024), and despite the weakness of economic activity, we do not rule out that the Central Bank finds it prudent to raise its interest rate a little more, to 8.0% in February (from the current 7.75%).

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