Peru | Inflation rises in August and will remain high in the coming months

Summary

Inflation in Peru stood at 0.07% month-on-month in August, raising the year-on-year rate to 4.4%. This increase is due to the readjustment of electricity tariffs and the rise in fuel prices. Core inflation moderated to 4.5%, but remains above the target range. Inflation is expected to remain high in the coming months.

Key points

• Key points:
• Year-on-year inflation rose to 4.4% in August, from 4.1% in July, a figure close to analysts' consensus.
• The monthly increase is explained by a 4.0% readjustment in residential electricity tariffs and the rise in vehicle fuel prices.
• Core inflation (excluding food and energy) moderated to 4.5% year-on-year, but continues to exceed the Central Bank's target range (2%, +/- one percentage point).
• The year-on-year rate is projected to remain above 4.0% in the coming months due to factors such as the El Niño phenomenon and oil prices.
• An increase in the monetary policy rate is not ruled out for the remainder of the year if inflationary expectations rise again.

Geographies

Topics

Tags