Peru: Inflation moderates in May
June 1, 2011
In May, consumer prices remained virtually unchanged over the previous month, falling 0.02%, which contrasted both the 0.68% rise registered in April and market expectations, which had seen consumer prices rising 0.20%. The subdued reading in May reflected lower prices for food as well as for housing, fuel and electricity, which were partly offset by rising prices for clothing and footwear. Owing to the May result, annual headline inflation edged down from 3.3% in April to 3.1% in May, halting the uninterrupted upward trend that began in December 2010, which pushed inflation to the highest level in two years. Despite the moderation, the annual reading exceeded the Central Bank's target of 2.0% for the tenth consecutive month, lingering above the upper limit of the tolerance margin of 1.0%. The Central Bank expects inflation to rise to a range of between 2.5% and 3.5% this year. For 2012, the Bank anticipates inflation will end the year within the 2.0% to 3.0% range.
Author: Ricardo Aceves, Senior Economist