Peru: Inflation slows in December
January 3, 2011
In December, consumer prices added 0.18% over the previous month, which was well above the 0.01% rise observed in November, undershooting market expectations that consumer prices would rise 0.35%. The December reading mainly reflected higher prices for transports and telecommunications (November: +0.08% month-on-month; December: +1.29% mom), as prices for passenger bus fares and air transport increased amid increased seasonal demand related to the holidays. Despite the monthly increase, annual headline inflation fell from 2.2% in November to 2.1%, closing the year in line with the Central Bank's target rate of 2.0% with a 1.0% tolerance margin. Headline inflation has been rising since the start of 2010 and peaked in September (2.4% year-on-year). In its December inflation report, the Central Bank anticipates inflation will end 2011 between 1.5% - 2.5%. For 2012, monetary authorities expect inflation to remain within the same range.
Author: Ricardo Aceves, Senior Economist