Inflation is projected to remain high in 2023.

Inflation in Peru will remain high in the coming months, BBVA Research warns.

To close this, it is expected that the index Prices is 6.8%, which is higher than the previously forecasted 5%.

This figure is above the BCR target range of 1% to 3%, but why?

Hugo Perea, Chief Economist at BBVA Research, notes that this result will occur because the local transfer of minors Prices commodities such as wheat or corn will not quickly translate into lower inflation at the local level.

As they point out, this is due to the fact that the manufacturers of goods using these resources have not fully passed on the increase in value to the final consumers.

“There is also uncertainty on the part of expectations (inflation), which are higher. This affects new contracts and price labels, which will no doubt take into account inflation still high for the next twelve months. A slow decline is expected,” Perea said.

In addition, he warned that the risk factor associated with fuel prices is the situation around tensions between Western Europe and Russia.

“There is still a hidden risk that affects quote the world price of oil, which, although it has fallen, is still high,” he said.

It is worth noting that the forecast of the Central Reserve Bank (CRB) is that inflation will be 6.4% at the end of this year, and a return to the target range is expected in the second or third quarter of next year.

dollar growth

BBVA Research forecasts also warn of dollar growthwhich will close in the S/3.90 to S/4 range due to worsening external accounts and greater risk perception.

“This pressure on the sun will be caused mainly by the current account balance; the external deficit will widen this year to 5%, higher than the previously predicted 3.2%, which is striking and suggests caution,” the economist added.

BBVA indicates that only in December the price dollar it will range from 3.85 to 3.95 spires, and by 2023 the exchange rate is expected to be in the range of 3.95 to 4.05 spires.

This forecast differs from what was estimated in the latest BCR Macroeconomic Survey, which indicates that for economic analysts and companies, the exchange rate will end this year at an average level of S / 3.80.