Peru: Inflation falls to two-year low in February
March 1, 2013
In February, consumer prices for metropolitan Lima fell 0.09% over the previous month, which contrasted both the 0.12% increase observed in January and market expectations that had prices rising 0.18%. Lower prices for food and non-alcoholic beverages were the main drivers behind the monthly drop.
As a result, annual headline inflation fell from 2.9% in January to 2.5% in February, which represents the lowest level since February 2011. Inflation remains within the Central Bank's target of 2.0% plus/minus 1.0 percentage points.
The Central Bank expects inflation to end both this year and next within a range of between 1.5% and 2.5%. LatinFocus Consensus Forecast panellists expect inflation to rise to 2.7% by the end of 2013, which is unchanged from last month's projection. For 2014, the panel expects inflation to fall to 2.6%.
Author: Ricardo Aceves, Senior Economist