Peru’s Consumer Price Index (CPI) went up 3.58% in the first eight months of 2023. In August, it rose by 0.40%.
In Lima, the CPI grew 0.38% in August, totaling a 3.30% increase since January. The national annual inflation rate hit 5.79%. Lima’s rate was 5.58%.
Food and non-alcoholic beverages increased by 0.98% in August. Transportation costs rose by 0.90%. Restaurants and hotels had a 0.43% hike.
Other categories like recreation and culture grew by 0.33%. Various goods and services saw a 0.31% increase. Healthcare costs rose 0.22%.
Household goods went up 0.20%. Communications costs dropped 0.33%. Housing and utilities fell 1.21%.
Alex Contreras, Peru’s Finance Minister, said inflation is slowing down. He noted inflation is returning to the 1-3% target range.
This is partly because Peru’s central bank raised its interest rate to 7.75%.
Contreras admitted that the minimum wage has lost buying power. Over the last three years, inflation was over 15%.
Inflation has been a concern in Peru for several years. The government usually targets an inflation rate between 1% and 3%.
In the past, spikes in inflation often led to social unrest. High inflation erodes the buying power of consumers, affecting the poorest the most.
Peru’s economy relies heavily on mining exports. Commodity price fluctuations can impact inflation rates.
The central bank uses interest rates to control inflation. A high rate can attract foreign investors but slows down spending.
The recent global economic conditions have also influenced Peru. Trade tensions and supply chain issues have contributed to inflation.
These are vital factors that policymakers have to consider for future planning.