Peru Inflation

Inflation ebbs in May from the prior month

Latest reading: Annual inflation in Lima fell to 3.9% in May from April’s 30-month high of 4.0%. Relative to the previous month's data, price pressures reduced for food and beverages in May (+2.9% in annual terms vs +4.2% in April). In contrast, there were higher price pressures for recreation and entertainment (+2.1% vs +1.8% in April), transport (+15.1% vs +15.0% in April) and housing and utilities (+1.0% vs -0.2% in April). Finally, the variation in clothing prices was the same as in the prior month (+1.4% in May and April). Lastly, consumer prices in Lima declined 0.16% in May in month-on-month terms, following a 0.52% increase in the prior month.

Panelist insight: On the inflation outlook, Itaú Unibanco analysts said: “Lower headline inflation in May offers only limited relief for the BCRP as the decline was largely driven by food prices, while core inflation continued to trend higher. We expect end-2026 inflation to reach 4.4%, driven by higher oil prices and sustained food price pressures in 2H26. Looking ahead to 2027, inflation should gradually converge toward the midpoint of the target range as supply-side shocks fade, although the disinflation process is likely to remain gradual.”

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