Peru Inflation August 2016



September 5, 2016

Consumer prices for Metropolitan Lima picked up slightly in August, increasing 0.36% over the previous month, which was up from the 0.08% rise registered in July and also slightly above the 0.30% increase expected by market analysts. While higher prices for food, housing and energy contributed positively to the overall price change, prices in the remaining categories remained virtually flat in August.

Inflation declined from 3.0% in July to 2.9% in August—the lowest rate since February 2015. In July, inflation reached the upper limit of the Central Bank’s target of 2.0% plus/minus 1.0 percentage point for the first time in 17 months, and in August the reading was even closer to the target inflation.

The core consumer price index, which excludes volatile items such as fresh food and fuels, rose 0.25% month-on-month in August (July: +0.17% month-on-month). Finally, core inflation edged down from July’s 4.0% to 3.9% in August, which was the lowest print in over a year.

The Central Bank indicated that it expects inflation to be between 2.7% and 3.2% 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 unchanged from last month’s projection. For 2017, the panel expects inflation of 2.8%.

Author: Marlène Rump, Senior Data Analyst

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Peru Inflation Chart

Peru Inflation August 2016 5

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

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