Peru: Inflation increases but remains subdued in May
June 6, 2018
Consumer prices in Metropolitan Lima increased 0.02% month-on-month in May, contrasting April’s 0.14% decline. May’s increase was mainly the result of higher prices for transport and communication, as a result of the rise in the international price of crude oil and the increase in the excise tax. On the other hand, lower prices were recorded for housing rentals, fuel and electricity, explained by the tariff reduction in residential electricity service.
Meanwhile, inflation rose. It increased to 0.9% in May, up from 0.5% in April, moving further away from March’s over seven-year low. In April (the last month for which data is available) core consumer prices, which exclude energy and food, increased 0.1% from the previous month, well below March’s subdued 0.8% jump. Finally, core inflation inched down from March’s 2.2% to 2.1% in April, the lowest reading in over seven years.
Peru Inflation Forecast
The Central Bank expects inflation to end 2018 at 2.0%. Panelists participating in the LatinFocus Consensus Forecast expect inflation to end 2018 at 2.8%, which is up 0.1 percentage points from last month’s projection. For 2019, the panel expects inflation of 2.7%.