BCRP: Rains in the north would impact the prices of some foods in March

The Central Reserve Bank of Peru (BCRP) warned that the monthly inflation rate for March would be higher than that of previous months (in January it was 0.23% and February 0.29%) due to temporary and seasonal factors.

carlos montoromanager BCRP Monetary Policyexplained that in March a jump in inflation is generally observed, due to the fact that in this period there is an increase in the prices of school and university pensions.

“In the month of March of last year, inflation was 1.5%; For this month of March we expect it to be somewhat lower, with which year-on-year inflation would accentuate its reduction this month”the official pointed out.

seasonality

However, this month’s inflation would also be influenced by the increase in food prices due to supply factors. The rise would be observed mainly in the food produced in the north, impacted by the greater rainfall in that area. So far this month alone, the price of lemons has increased by around 19%.

“Casually, these rains could have an impact on the prices of some foods that are produced in the northern region, as is the case with lemon. They have been seeing some increases in the case of lemons of around 19% so far this month,” emphasized Montoro, who specified that this increase will be temporary.

He added that in the case of the price of chicken an increase is also being observed, due to the fact that the supply of this bird has been reduced due to the increase in cases of avian flu in birds and due to less access to soybean meal, a of the main sources of protein for your food.

However, as in the case of lemon, the rise in the price of chicken will be transitory, since it is expected that in the following months a reduction in its cost will be observed, as a result of the impact of the measures implemented by the Executivesuch as the importation of fertile eggs and the vaccination of birds, which will allow chicken production to begin to normalize.

But not all of it is bad news, since the BCRP highlighted that the price of white potatoes has fallen by 27% so far this month.

Impact of lockdowns

For his part, Jorge Guillena finance professor at the Esan Graduate School of Business, points out that the roadblocks in the south of the country also have an impact on prices due to the increase in the cost of transporting certain foods.

Another factor that influences inflation, adds the expert, are international prices that are moderating slightly. “There are so many internal and external factors that make these upward price pressures not end, which is global”Guillen says.

According to the BCRP, a marginal increase of 1.6 percentage points was observed in inflation in the regions that have been affected by the roadblocks.

Protests affected GDP less

Due to the fact that the social protests during February occurred to a lesser extent than in the previous months, the economic impact was reduced, the BCRP estimated.

“Taking into account the estimated impact of four percentage points for the month of January, this would be reduced by half, by around two percentage points for the month of February, in terms of the impact of economic activity”Carlos Montoro said.

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Carlos Montoro, BCRP Monetary Policy Manager

“You’ve been seeing some increases. In the case of lemon, around 19% so far this month. On the other hand, there are other products that have been declining, such as potatoes.”