Peru: Inflation hits highest level since April 2017 in June
July 8, 2021
Consumer prices rose 0.52% from the previous month in June, picking up from the 0.27% increase recorded in May. June’s figure was mainly driven by rising food and beverage costs, and a rebound in housing price pressures, but was also aided by a marked depreciation in the sol during the past few months.
Inflation rose to 3.3% in June, above May’s 2.4% and marking the highest inflation rate since April 2017. As a consequence, annual average inflation rose to 2.2% in June (May: 2.1%). Lastly, core inflation rose to 2.0% in June, from May’s 1.8%.
Regarding the outlook, analyst at the EIU commented:
“We expect the higher inflation in the short term to be driven by currency depreciation caused by uncertainty regarding Mr Castillo's economic policies and fears about political instability. Higher commodity prices for imports, especially oil, are also likely to increase price pressures. Our inflation forecasts assume that the BCRP remains autonomous and raises rates to prevent a dramatic escalation of inflation.”
Author: Stephen Vogado, Economist