affirmed that a sharp slowdown in inflation is expected from March 2023 and thus return to the target range in the second half of next year.
"For this month, we expect there to be a
slight deceleration in the inflation rate. Yet we expect a strong reduction starting March. Thus, we will observe lower rates in March, April, May, June, and July," he forecast during his presentation at the American Chamber of Commerce of Peru (AmCham Peru) on Friday.
While presenting the Macroeconomic Outlook 2022-2023, the economist recalled that the high inflation cycle had begun last March due to Russia's invasion of Ukraine, which triggered an increase in the price of food and fuel worldwide.
"Inflation in March reached 1.5%; subsequently, the rates remained high over the following months," he noted.
Monetary policy
Regarding the restrictive monetary policy that the Central Reserve Bank of Peru has been implementing, Velarde stated that modifying it next year or maintaining it will depend on the data presented by both domestic and international markets.
"Other countries, in the region included, are looking to cause a recession in their economy to stop inflation. In our case, we believe that inflation can be controlled by expanding around potential growth, without causing a recession," he noted.