Peru | Inflation Holds Firm: Back at 4.0% in June

Summary

June inflation remained elevated, at 4.0% y/y, driven by weather-related factors that pushed up prices for fish, fruit, and eggs, while Transport fell on lower fuel prices. Core inflation also rose, to 4.5% y/y, reflecting the pass-through of earlier fuel price increases to urban transport costs.

Key points

• Key points:
• June inflation rebounded to 0.23% m/m, reversing May's decline (–0.16%) and exceeding the Bloomberg consensus (0.06% m/m). The year-on-year rate rose to 4.0%, from 3.9% in May.
• The increase was explained by weather-related factors: anomalous swell drove up the price of bonito and jack mackerel, temperature anomalies in the north affected mango, and heat reduced hens' egg-laying, pushing up egg prices.
• Transport posted the sharpest decline (–0.46%), on lower gasohol and diesel prices (–6.5% each) and vehicular LPG (–2.0%), although interprovincial bus fares rose 1.8% on higher demand.
• Core inflation rose 0.08% m/m, lifting its year-on-year rate to 4.5% (from 4.4% in May), reflecting the persistent pass-through of earlier fuel price increases to urban transport costs.

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