Peru Inflation July 2016


Inflation falls back within Central Bank's target range in July

Consumer prices for Metropolitan Lima remained broadly stable in July, increasing just 0.08% over the previous month, which was down from the 0.14% rise registered in June and below the 0.24% increase expected by market analysts. While higher prices for potatoes and fish contributed positively to the overall price change, poultry and vegetable prices decreased and almost entirely offset the increase in consumer prices.

Inflation declined from 3.3% in June to 3.0% in July. July’s print marked the lowest rate since February 2015 and inflation reached the upper limit of the Central Bank’s target of 2.0% plus/minus 1.0 percentage points for the first time in 17 months.

The core consumer price index, which excludes volatile items such as fresh food and fuels, rose 0.17% month-on-month in July (June: +0.23% month-on-month). Finally, core inflation edged down from June’s 4.1% to 4.0% in July, which was the lowest print in a year.

The Central Bank indicated that it expects inflation to be between 3.0% and 3.5% in 2016 and between 2.0% and 2.2% in 2017. Panelists participating in the LatinFocus Consensus Forecast expect inflation to end 2016 at 3.0%, which is down 0.2 percentage points from last month’s projection. For 2017, the panel expects inflation of 2.8%.

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Peru Inflation Chart

Peru Inflation July 2016 1

Note: Month-on-month and year-on-year variation of consumer price index in %.
Source: Peru National Statistical Institute (INEI)

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