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Inflation in 2022 will be the highest in 26 years

BCR President Julio Velarde points out that central banks’ fear is not that inflation will not fall, but rather that it will remain at very high levels. | Fountain: Andean

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Inflation in Peru reached 8.4% in November, according to Central Reserve Bank (BCR)and will continue to border this figure at the end of 2022.

Although annual inflation in Peru is lower than in countries such as Chile and Colombia, we are expected to have the highest rate in 26 years.

Lately forecasts BCR indicate that by 2022 inflation will no longer be at the level of 7.8%, but at the level of 8.2%, the highest level since 1996. At that time, the price index was 11.8%.

just keep in mind food and energyprices would have risen 11.3% over the past 12 months.

In addition, the non-food and energy price index stands at 5.7%, above the target range of 1% to 3%.

Despite this, the latest BCR forecasts indicate that next year we will already see a decline in the level inflation.

“Inflation is expected to enter the target range by the end of 2023, given the reversal of transitional effects, economic growth around its potential without inflationary demand pressures, and inflation expectations returning to the target range,” they note.

BCR estimates inflation at 3% by the end of 2023 and predicts it will fall to 2.4% by the end of 2024.

there are still concerns

BCR President Julio Velarde recently pointed out that central banks’ fears are not that inflation will not come down, but that it will remain at very high levels.

” worst case scenario is that it goes down and stays at 4%. This is a great fear. It’s not that she didn’t fall, but she didn’t fall enough,” he said recently.

According to the head of the BCR, for inflation to return to ideal levels in the second half of 2023, there must be a scenario in which food prices do not rise or fall slightly due to international trends, and energy prices do not rise.

Source: RPP

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