Peru’s inflation at the end of May was below 8% for the second consecutive month, leaving behind the 11 months it remained at that level.
However, the downward trend in this indicator continues to be slow.
According to the National Institute of Statistics and Informatics (INEI), Lima’s consumer price index (CPI) rose by 0.32% in May, down from 0.56% in April and even lower than 1.25% in March, affected by weather events.
Thus, this year’s accumulated CPI stands at 2.67%, while inflation in the fifth month of 2023 stands at 7.90%.
The president of the Central Reserve Bank (BCR), Julio Velarde, acknowledged at a conference in New York last week that Peruvian inflation was falling “more slowly than expected” and could reach the target later than anticipated.
However, the monetary entity maintains its projection that the year will end with 3% inflation in Peru – within the target range.
This projection could be updated this June when the inflation report is updated.
Velarde also said in May that the decline in inflation “may take a little longer than one expects,” pointing to a return to the 1% to 3% range by December 2023, January, or February 2024.
Most analysts believe that the decline of Peruvian inflation towards the target range will only be achieved by the first quarter of 2024 because prices in the country remain high, and there is still pressure on the basic family basket.
Food inflation in Peru is still above 10%.
Four months ago, the BCR Board of Directors decided to pause the increase in the benchmark interest rate, which currently stands at 7.75%, amid a slowdown in economic activity and an expected decline in the CPI due to the base effect.
With information from Bloomberg
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