RBC: rains in the north will impact the rise in food prices and inflation in March

The intense rains recorded these days in northern Peru due to the effects of the Cyclone Yaku could have an impact on the prices of certain staple foods, which would have repercussions on inflation rate Monthly March.

Given this, the gMonetary Policy Director of the Central Reserve Bank (BCR) of Peru, Carlos Montoroduring his presentation of the monetary program for March, pointed out that the recent rainfall would be one of the factors that would affect the prices of products produced in the north of the country, such as lemon and the rice.

“So far this month, there has already been an increase in lemon price about 19%; However, there are other products that have already reduced their price, such as potatoes, which already have a 27% discount, said the head of the monetary entity.

Moreover, another factor that could have an impact on inflation in March would be the avian flu, which affects the chicken production. “In chicken there has been an increase in bird flu and there has been less access to soybean meal, it is expected that in the coming months the impact of certain measures will be felt , such as importing fertile eggs and vaccinating birds, and that should reduce the price,” Montoro said.

Similarly, the RBC representative said that another increase that would add to inflation in March would be the increase in the tuition price and university.

Montoro also pointed out that in March, RBC is planning a inflation which will be higher than the previous months in line with the results historically recorded in the third month of the year. In this sense, March is a month where there is usually a typical jump in consumer prices due to seasonal effects.

In this sense, the RBC representative indicated that by March it is expected that the monthly inflation be just under 1.5% compared to last year, with which the 12-month inflation in Lima would accentuate its reduction in the third month of the year.

The ace inflation expectations to 12 months fell from 4.62% in January 2023 to 4.29% in February, above the upper limit of the inflation target range, the BCR said.

In addition, the monetary entity indicated that the inflation expectation for 2023 also decreased from 4.73% to 4.50%.

“A downward trend is predicted for Annual inflation since March with the return to the target range in the fourth quarter of this year due to the moderation of the effect of international food and energy prices, the reversal of supply shocks in the agricultural sector and a reduction in inflation expectations in the rest of the year,” Montoro said.