Peru Tames Inflation to 1.69%, Outpacing Latin American Peers on Price Stability

Peru’s National Institute of Statistics and Informatics (INEI) reported an annual inflation rate of 1.65% for April 2025, up from March’s six-and-a-half-year low of 1.28% but still within the Central Bank’s 1–3% target range for the 13th consecutive month.

Monthly price growth slowed to 0.32% in April from 0.81% in March, reflecting mixed sector performance. Food and beverage prices reversed course, rising 0.97% annually after a 0.82% drop in March, while recreation and culture costs climbed to 2.90%.

Transportation and utility prices fell, offsetting these increases. The Central Bank maintained its benchmark interest rate at 4.75%, signaling confidence in price stability despite global trade uncertainties.

Peru’s economy grew 4.7% year-on-year in March, driven by mining and construction, with full-year GDP growth projected at 3.1%. The sol currency strengthened to 3.72 per dollar, lowering import costs, while copper export revenues surged 12–15% above 2024 averages.

Fiscal deficits are expected to narrow to 2.4% of GDP in 2025, with public debt projected at 36% of GDP by 2030. Inflation’s stability shields household purchasing power and supports business investment in a nation where 22% still live in poverty.

With Latin America’s lowest inflation—below Brazil’s 3.2% and Mexico’s 4.1%—Peru remains a regional outlier, balancing commodity-driven growth with structural challenges in public services and inequality.

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