Peru: Inflation moderates in October, but remains above target
November 2, 2015
Consumer prices for Metropolitan Lima increased 0.14% over the previous month in October, which was above the 0.03% rise registered in September. This was slightly stronger than the 0.10% increase expected by the market. The result reflects that higher prices in several categories, including food and beverages, as well as clothing and footwear, were partially offset by lower prices for transport and communications.
Inflation moderated from 3.9% in September to 3.7% in October. However, inflation is still well above the upper limit of the Central Bank’s target of 2.0% plus/minus 1.0 percentage point. The weak Peruvian sol is contributing to inflationary pressures, and above-target inflation led the Central Bank to hike its main interest rate in September for the first time in over four years.
Author: Carl Kelly, Economist