Peru | Inflation in July remains low, with a seasonal rise due to national holidays

Summary

Consumer Price Index (CPI) increased by 0.23% in July 2025, in line with expectations. As a result, year-on-year inflation remained at 1.7% comfortably within the Central Bank's target range. Core inflation, which excludes food and energy also stood at 1.7%.

Key points

• Key points:
• In July, food prices show positive variations, particularly for fish and seafood. There were also rises in transportation, restaurant, and hotel prices, linked to national holidays. In contrast, household fuel prices (propane gas) experienced a negative change.
• We estimate that in the third quarter, inflation will remain between 1.5% and 2.0% on a monthly average. For the last quarter of 2025, we anticipate a slight increase, projecting a 2.2% year-end inflation due to a low comparison base.
• We believe the Central Bank will hold its reference interest rate in the short run, currently at 4.50%, a level we consider neutral.
• We maintain a downward bias (further policy rate cuts cannot be ruled out), given that inflation will remain below the center of the target range in the short term.

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