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Peru Inflation December 2021

Peru: Inflation comes in at highest level since January 2009 in December

Consumer prices increased 0.78% in December over the previous month, following November’s 0.36% increase. December’s uptick was the highest reading since August. Looking at the details of the release, larger increases in transport costs and food and beverages prices led to the higher overall rise.

Inflation came in at 6.4% in December, up from November’s 5.7%. December’s result represented the highest inflation rate since January 2009. Annual average inflation rose to 4.0% in December (November: 3.6%). Lastly, core inflation rose to 3.8% in December, from November’s 3.4%.

Commenting on the outlook for inflation in 2022, Diego W. Pereira, economist at JPMorgan, stated:

“We expect inflation to decelerate this year, converging to 3.8% yoy by December 2022. That said, the prevailing policy and regulation uncertainty should continue exerting pressure on the currency, which together with still high commodity prices is likely to prevent a quicker deceleration of tradable prices. Regarding services prices, we expect core CPI to start decelerating already in Q2 2022. In all, we expect headline inflation to print in a 5.9%–6.4% yoy range for most of the first half of the year, averaging 6.2% in H1 2022. For the second half of the year we expect deceleration, so for headline to average 4.6% in H2 2022.”

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