Inflation in Peru's capital unexpectedly accelerated for the sixth consecutive month in April, reaching its highest annual pace since late 2023. Consumer prices in Lima rose 4.01% over the last 12 months, an increase from March's 3.80% reading. This figure surpassed the median estimate of 3.70% from economists surveyed by Bloomberg and represents the fastest annual inflation since October 2023, when it hit 4.34%.
This continued acceleration in inflation comes after prices topped the central bank's target range in March for the first time in two years. In June, inflation in Lima again unexpectedly accelerated to 4.01% year-over-year, exceeding the 3.81% median estimate. By July, inflation in Lima climbed to 4.07% annually, surpassing the 3.92% median estimate, driven by significant increases in transport (14.30%), restaurants and hotels (4.18%), and food and non-alcoholic drinks (3.46%).
The central bank of Peru aims for an inflation rate between 1% and 3%. Policymakers had previously stated that inflation would slow to this target range early the following year, though they acknowledged upside risks due to the potential impact of the El Niño weather phenomenon on food prices. The policy rate has been held steady at 4.25% for ten consecutive months. The Peruvian economy is projected to grow by more than 3% this year, supported by high metal prices and robust private spending, with anticipated improvements in investor confidence under the new administration.
