Peru: Inflation inches up in March
April 1, 2013
In March, consumer prices for metropolitan Lima jumped 0.91% over the previous month, which contrasted the 0.09% fall observed in February and overshot market expectations of a 0.55% increase. The monthly spike was mainly the result of higher prices for food and non-alcoholic beverages as well as for culture and education, as a result of the start of the academic year.
Against this backdrop, annual headline inflation rose to 2.6% in March from 2.5% in February, which had represented the lowest level in two years. Nonetheless, inflation remains within the Central Bank's target of 2.0% with a tolerance margin of plus/minus 1.0 percentage points.
In its March inflation report, the Central Bank left its inflation forecasts unchanged and expects consumer prices 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 2.6% by the end of 2013, which is down 0.1 percentage points from last month's projection. For 2014, the panel expects inflation to fall to 2.5%.
Author: Ricardo Aceves, Senior Economist