Inflation in Peru's capital, Lima, showed an unexpected acceleration in April, marking the sixth consecutive month of rising prices and reaching its fastest pace since late 2023. Consumer prices in Lima rose 4.01% over the last 12 months, according to data released by the national statistics agency INEI. This figure is higher than March's 3.80% reading and surpassed the 3.70% median estimate from economists surveyed by Bloomberg. The 4.01% annual rate is the highest recorded since October 2023, when inflation stood at 4.34%.
This recent surge follows a period where inflation in February broke a more than year-long streak of being below the central bank's target mid-point, rising 2.21% annually in Lima. This was above the 1.70% in January and exceeded the 1.74% median estimate. Food prices, particularly chicken (up 8.5%) and eggs (up 18.0%), along with vegetables, contributed significantly to the February increase, which saw a 0.69% month-over-month rise in Lima's CPI. A residential water tariff adjustment also played a role.
March saw inflation in Peru's capital city jump notably, reaching above the target for the first time in two years, driven by a combination of a domestic gas crisis, higher global oil prices, and adverse weather conditions. While April continued this upward trend, May brought a slight deceleration. Inflation in Lima for May came in below expectations, but still remained above the central bank's target range for the third consecutive month, indicating persistent price pressures despite the marginal slowdown.
The unexpected acceleration in April suggests ongoing challenges for the Peruvian central bank in controlling price stability. The annual inflation rate of 4.01% in April is a key indicator that despite earlier hopes for easing, inflationary pressures remain significant. The consistent upward trend since October 2023, with only a slight respite in May, highlights the volatility and complexity of the current economic environment in Peru.
