Annual inflation slowed down in March, why?

The National Institute for Statistics and Informatics (INEI) reported that in March consumer prices in Peru they rose by 1.19%, but annual inflation slowed down from 8.99% to 8.67%.

But why does he price increase year on year was lower than in recent months? Phase Consultores economist Juan Carlos Odar notes that this result compares March 2022 inflation to this year’s inflation.

“This causes the annual rate to fall because last year’s March rate was unusually high due to a combination of several factors, this time it has dissipated somewhat, but not completely, we have the case of Trujillo in which inflation was higher, this is due to the weather and how it affected the supply and free transit,” he commented.

The INEI report indicates that climatic events have mainly affected the supply in the northern regions, and as there are fewer products in the markets and in stores, prices are rising.

Just last month, the price index rose more strongly in Piura, Trujillo, Chiclayo and CajamarcaHow are things now with the southern regions, which showed the largest increase in January and February?

“In the south of the country, cities affected by social conflicts introduced price normalization last month by streamlining access to main roads and highways and improving the supply of various products, mainly fuel and domestic gas,” the ERI points out.

For his part, Professor Arturo Garcia of the ESAN University notes that in the southern regions the problem of social conflicts, which had a strong impact in the period from December to February, has passed, and since then there has been a slowdown. Prices.

“Inflation is expected to slow down for the rest of the year (…) the trend is driven by what is to come, perhaps a coastal baby and a slowdown in global food and energy prices,” he commented.

Odar agrees that there will be lower inflation in the coming months, but points out that it will be progressive.

“It is very likely that the effect of a larger inflation It will give way, in the coming months this recovery is likely to take hold, but it will not be a linear recovery, that is, it will not fall continuously from month to month. the effect of the protests seems to be completely weakened, with the exception of Puno, Puerto Maldonado and Tacna,” he says.

Despite this, Peruvians still report that the cost of food and services remains high, but what is the minimum that a small family can spend to survive in Peru?

“The basic food basket for a family of four is 1,670 soles, the minimum that can be spent to avoid poverty, and in metropolitan Lima it is almost 2,000 soles (…) We have a problem when we analyze the incomes of people across the country, the average income is 1,500 soles,” says Monica Munoz Najar, an economist at Red de Estudios para el Desarrollo (REDES).

Donita Rodriguez, head of macroeconomic analysis at Apoyo Consultoría, points out that even Houses Low-income people spend just over half of their monthly budget on food, and this spending category has grown by more than 16% over the past year.

In addition to the increase in school and university fees, food items rose the most last month, including chicken, chicken eggs, strawberries, celery, purple corn and lemon.

While products Potatoes in their huairo, yellow, and white varieties, as well as peas, white grapes, and robust avocados, had the biggest declines.