Thursday, September 21

Peru central bank expects July inflation to fall below June rate

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LIMA — Peru’s central bank expects monthly inflation in July to be lower than June’s rate of 1.19%, a bank official said on Friday, offering some optimism after annual inflation rates hit a two-decade high in the copper-producing Andean nation.

Adrian Armas, the bank’s manager of economic studies, added he expects monthly consumer prices to ease further in August, but noted that the impact of inflation would continue to be felt.

“The pressures that we have seen on domestic inflation unfortunately remain,” Armas said, adding “the bank’s forecast indicates that monthly inflation rate will still be high.”

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Prices in Peru rose 4.44% in the first half of the year, while annual inflation stood at 8.81% in June, its highest level since July 1997 when the country was struggling with an inflationary problem, according to official data.

Fuel and food prices have been soaring worldwide in the past months amid Russia’s invasion of Ukraine. Europe has been particularly impacted but the situation has affected economies all over the world.

Aiming to mitigate soaring consumer prices, Peru’s central bank raised the country’s benchmark interest rate by 50 basis points to 6.0% earlier this week, the twefth consecutive hike, as authorities attempt to battle stubbornly high inflation.

(Reporting by Marco Aquino in Lima Writing by Aida Pelaez-Fernandez Editing by Isabel Woodford and Matthew Lewis)