Bloomberg News

Peru Consumer Prices Fell Last Month as Economic Growth Slowed

July 01, 2012

Peruvian consumer prices fell for the first time in five months in June after food and fuel costs declined amid slowing economic growth.

Prices slid 0.04 percent in the month and gained 4 percent from the year earlier, the national statistics agency said in an e-mailed statement. The median estimate of 11 economists surveyed by Bloomberg was for prices to gain 0.1 percent in June.

The central bank has held its benchmark lending rate at 4.25 percent for 13 months on expectations annual inflation will return to its target range of 1 percent to 3 percent amid slower global growth. The government last week added $750 million to a stimulus plan designed to bolster employment after the economy expanded at the slowest pace in more than two years in April as exports dropped 12 percent.

“Inflation should ease to just within the target range this year because globally the situation is going to be complicated,” Augusto Saldarriaga, the head of analysis at Banco Internacional del Peru, said by phone from Lima. “The government’s measures to boost investment may spur growth and stir some inflationary pressure.”

Food and drink prices dropped 0.3 percent in June, while gasoline declined 0.7 percent, the agency said.

Gas stations cut fuel prices by as much as 7 percent on June 28 after crude oil dropped below $80 a barrel for the first time since October, which will be reflected in July inflation data.

The government’s consumer-price index is based on a survey by the statistics agency of businesses in the Lima Metropolitan area. Food and drink products constitute 38 percent of the index.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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