Scotiabank revises its inflation forecast in Peru downward from 5% to 4.6% in 2023

The Department of Economic Studies of the Scotiabankrevised its inflation projection downward for 2023 from 5% to 4.6%, due to the trends that have occurred in the variation of prices, below expectations.

“Inflation and inflation trends have been below what we expected over the last three months, reaching in September the inflation rate we expected for the entire year (5%),” he highlighted.

“According to the key prices that we follow, inflation for the month of October was 0.11% in the first 10 days of the month,” he added.

However, this was before the increase in world oil prices, following the events in the Middle East, according to the report collected by the Andina portal.

“If the current trend continues, inflation this month would be between 0.3% and 0.4%, a pace similar to that of October 2022 (0.35%) and, therefore, 12-month inflation would remain relatively stable, between 4.8% and 5%,” he commented.

This is the base scenario that the Scotiabank Economic Studies Department has for October, although now with upward risk.

“If inflation falls below 5%, even just a little, it would have a psychological impact,” he said.

Likewise, he commented that inflation was extremely high for the months of November and December of 2022, so there is a good chance that general inflation will continue to decrease in the rest of 2023.

“This reason leads us to revise our projection from 5% to 4.6% despite the upside risks. Without those risks, the revision would have been closer to 4%,” he stressed.

Finally, he pointed out that for the year 2024 they have revised their inflation projection from 3.5% to 4%, incorporating a moderate to strong El Niño scenario, unlike the weak to moderate one with which they had been working.