Consumer prices in Lima rose 4.44% in August compared with the same month a year earlier, the national statistics agency INEI reported on Tuesday. The pace was the fastest recorded in nearly three years and slightly exceeded the 4.41% median projection of economists surveyed by Bloomberg. The August figure marks an acceleration from July's 4.07%.
The increase was led by higher prices in housing and utilities, with electricity and gas among the components contributing to upward pressure during the month. On a month-on-month basis, the consumer price index for the capital climbed 0.07% in August, a touch above the 0.05% median estimate.
Peru's central bank, led by Julio Velarde, aims for annual inflation of 1% to 3% and seeks readings as close to the midpoint of that range as possible. The reported annual inflation rate has remained above that target band for six months, including the August print.
The central bank's monetary policy committee is scheduled to meet on Sep. 10. The policy interest rate has been held steady at 4.25% for 11 consecutive months.
Lima's consumer price trends are commonly used as a proxy for national inflation, with the statistics agency treating the capital's data as the primary measure of price changes across Peru.
Context and implications
The August data underline continued upward pressure on consumer prices in the capital, anchored by housing-related costs and utility bills. The persistence of inflation above the central bank's target range for half a year adds a focal point to the policy committee's upcoming deliberations.
While the policy rate has remained unchanged for nearly a year, the central bank's next meeting on Sep. 10 will occur in the context of elevated annual inflation in Lima.