Peru: Inflation falls to lowest level in over a year
August 1, 2012
In July, consumer prices added 0.09% over the previous month, which contrasted the 0.04% drop recorded in previous month but fell slightly short of market expectations of a 0.11% rise. The monthly reading reflected higher prices for food and non-alcoholic beverages, which offset declining prices for transport and communications. Building on the subdued monthly reading, annual headline inflation dropped from 4.0% in June to 3.3% in July, which represents the lowest level seen since June 2011. Nonetheless, inflation remains above the upper tolerance margin of the Central Bank's target of 2.0% plus/minus 1.0 percentage points. The Central Bank expects inflation to fall within a range of 2.0% and 3.0% by the end of 2012. For 2013, the Bank sees inflation falling further within a range of 1.5% and 2.5%.
Author: Ricardo Aceves, Senior Economist