Trujillo, Chiclayo and Arequipa are the most expensive cities in Peru, according to the INEI: why is this?

According to the technical report on Variation in Price Indicators of the Economy, recently issued by the National Institute of Statistics and Informatics (INEI), between January and December 2023, Trujillo, Chiclayo and Arequipa They consolidated themselves as the cities with the highest inflation in Peru. Which means that, during the past year, the price increases in these cities were the highest compared to others.

Inflation is denoted in the Consumer Price Index, which, in the case of Trujillo, was 5.34%, on average, during the 12 months of last year; They are followed by Chiclayo, with 4.74%, and Arequipa in third place, with 4.45%. It must be taken into account that these figures are above national inflation, which is 3.41%.

What does it mean that Trujillo, Chiclayo and Arequipa register the highest inflation in Peru?

According to what was explained by the economist and researcher Armando Mendoza, inflation accounts for the constant increase in prices of various products and services within these cities within a year. That is to say, for example, compared to 2022, in the city of Trujillo prices rose by 5.34% during 2023.

Why does inflation increase more in some cities than in others?

According to Armando Mendoza, a series of factors explain why inflation is higher in some cities than in others, but in general he detailed the following:

• There are products whose prices grow due to the increase in demand, that is, the population buys some goods in quantity.
• When supply is reduced, that is, the production of a good or product falls or demand exceeds it.
• The rise in fuel costs.
• The characteristics of each city or region must also be taken into account, according to the production of its products and services, which generates a kind of internal inflation.
• Other situations are the distances for the transfer of goods.

On the other hand, according to the INEI technical report, the Consumer Price Index rose due to the increase in prices of various products and goods.

• Restaurants and hotels: prices in these increased by 6.81%. For example, food service in restaurants, such as breakfast, rose 9.1%, while menu items increased by 6.7%. Chaufa rice increased by 8.8%, while chicken broth increased by 8.1%. Grilled chicken also appears, with 7.5%; ceviche, 7.4%, among others.
• Various goods and services: presented an annual variation of 4.30%. The highest prices for services were recorded in hairdressing salons and beauty establishments (6%); also personal care items and products, such as toilet soap (11.3%), toothpaste (6.1%), sanitary towels (5.2%) and disposable diapers (4.7%), among others.
• Food and non-alcoholic beverages: increased by 3.68%. Meats (6.1%) contributed to this result, such as chicken giblets (10.8%), beef (9.9%), chicken (7.2%) and chicken (5.7%). . Also the increase in prices of bread and cereals (5.9%), such as bulk rice (10.4%), unprepared wheat flour (9.1%). In fruits (4.6%), such as mango (55.1%), strawberry (38.6%) and Israeli apple (16%). While in milk, cheese and eggs it increased by 4.4% compared to 2022. The list continues with several other products.
• Transport: showed a variation of 2.16%, explained by price increases in road passenger transportation (3.8%).

Why does Trujillo occupy first place for inflation in the national territory?

The situation in Trujillo had been observed for several months by economists and specialists in the northern part of Peru. Francisco Huerta Benites, dean of the College of Economists in La Libertad, months ago, explained some of the causes of the increase in inflation in the northern city:

• Inefficient marketing channels: the places where products are sold are not the most efficient. The dean recommended creating a wholesale market or mass establishments.
• Citizen insecurity in Trujillo: This factor increases the price and production of products.
• Fertilizer shortage in the country: Farmers have been forced to increase the price because they cannot access cheap fertilizers.