Peru Inflation May 2016


Peru: Inflation eases in May

June 3, 2016

Consumer prices for Metropolitan Lima rose slightly in May, increasing 0.21% over the previous month, which was above the 0.01% rise registered in April and a notch above the 0.19% increase expected by market analysts. The sub-category for alcoholic beverages and tobacco recorded the strongest price increase due to a hike of an excise tax on cigarettes, effective from 5 May, which made tobacco products about 20% more expensive over the previous month. All other sub-categories tallied modest month-on-month increases.

Inflation eased from 3.9% in April to 3.5% in May and remained above the upper limit of the Central Bank’s target of 2.0% plus/minus 1.0 percentage points for the fifteenth consecutive month. However, May’s reading marked the lowest result in a year.

The core consumer price index, which excludes volatile items such as fresh food and fuels, rose 0.41% month-on-month in May (April: +0.19% month-on-month). Finally, core inflation inched up from April’s 4.0% to 4.1% in May.

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 3.2%, which is unchanged from last month’s projection. For 2017, the panel expects inflation of 2.9%.

Author: Marlène Rump, Senior Data Analyst

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Peru Inflation Chart

Peru Inflation May 2016

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

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