Peru | Year-on-year inflation stabilizes and will begin to decline from March

Summary

Inflation increased 0.29% monthly in February. This was due to the rise in the prices of some foods and the seasonal increase in the cost of education services. On the other hand, it is worth noting the decrease in residential electricity rates.

Key points

• Key points:
• The year-on-year inflation rate decreased slightly to 8.65% in February (January: 8.66%).
• Core inflation stood at 0.27% in February (January: 0.05%). In year-on-year terms, this inflation indicator registered a level of 5.87%, an acceleration for the second consecutive month (5.59% in December last year and 5.80% in January).
• As usual, March monthly inflation is expected to be relatively high. However, we estimate that year-on-year inflation will show a marked decrease due to a high base of comparison and could print at levels close to 8.0%.
• We anticipate that the downward trend in year-on-year inflation will intensify in the second quarter. In this context and assuming that inflationary expectations stabilize, the Central Bank would maintain the reference rate at 7.75% at its next meeting on March 9.

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