Peru: Inflation rises in November
July 7, 2010
In November, consumer prices remained virtually unchanged, rising 0.01% over the previous month. The monthly reading contrasted the 0.14% drop observed in October but undershot market expectations, which saw consumer prices rising 0.20%, as a result of an increase in fuel prices. The main drivers behind the November reading were higher prices for housing and electricity, as well as for health care. As a result of the price increase in November, annual headline inflation rose from 2.1% in October to 2.2% in November, exceeding the Central Bank's target rate of 2.0% for a fourth consecutive month. In a recent statement, Central Bank President Julio Velarde anticipated that inflation will close the year below the 2.5% - 3.0% inflation expectations previously reported by the Central Bank, despite a possible price spike in the final month of the year, as a result of seasonal factors. For 2011, monetary authorities expect inflation to end between 1.5% and 2.5%.
Author: Ricardo Aceves, Senior Economist