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Julio Velarde: “We are on the way to defeating inflation”

Julio Velarde: “We are on the way to defeating inflation”

Inflation is on track to reach the target range – set between 1% and 3% – for the first half of 2024, according to the Central Reserve Bank (BCRP). In this way, the entity reported an adjustment in the projection of this indicator, going from 3.8% to 3.1% by the end of 2023, due to the fact that the prices of some foods have shown a correction in the last months of the year. anus.

“Inflation is clearly falling, but we cannot claim victory. Only if it remains in this range in June or July can we say that we have already defeated inflation, but we are on our way to doing so and faster than the rest of the region,” said Julio Velarde, president of the BCRP, during the presentation of the latest inflation report of the year.

For December, inflation is expected to be 0.20%, and by 2024 it would reach 2.3%, although it will be subject to the impacts that the El Niño Phenomenon may have and that the geopolitical situation, today quite uncertain, does not worsen. .

June 2021 was the first time, post-pandemic, that the inflation rate exceeded the target range – reaching its maximum value a year later (8.81%) – therefore, in August of that year the rate began to rise. reference interest rate until January 2023 and today it has already been lowered four consecutive times.

The official explained that both In 2021 and 2022, Peru had common clashes with the rest of the world that raised the prices; However, in 2023 two internal factors caused the fall in inflation to arrive late: the avian flu that led to the mortality of birds for consumption and the high temperatures that increased the price of lemons by up to 200%.

Thus, inflation has been falling significantly since June, since in May it was at 7.89% and in the penultimate month of the year at 3.64%.

While core inflation – without food and energy – fell from 5.11% to 3.09% in the same period and is the lowest than other countries in the region, the United States, the eurozone and other developed countries. This year is expected to close at 2.9%.

Only in food and energy this indicator went from 12% in 2022 to 4.28% in November 2023. Between January and November, lemon (-27.8%), potatoes (-26.3%), transportation national land (-19.8%), fresh fish (-14.6%), vegetable oil (-8.2%) were the ones that contributed the most to a negative variation in inflation.

The data

Basket. In Metropolitan Lima, The value of the basket of basic foods consumed fell in November for the third consecutive month and reached its lowest level in 11 months, according to Phase Consultores. Although rice and milk continue to show maximum values.

The numbers

  • 6.75% is the current reference rate, after four cuts of 25 bps.
  • 104 consumer items registered a CPI greater than 3% in November.
  • The average price of liquid fuels decreased by 5.7% as of November.

Source: Larepublica

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