Peruvian annual inflation eases to lowest level in more than two years

(Reuters) – Annual inflation in Peru decelerated to 5.04% in September to hit its lowest level in more than two years, according to official figures published on Sunday, though consumer prices remained some way above the central bank’s target rate.

Data from national statistics agency INEI showed the key index based on the metropolitan region of Lima slowed to its lowest level since August 2021, when it stood at 4.95%.

On a month-to-month basis the Lima Consumer Price Index, Peru’s inflation benchmark, inched up 0.02% in September, well below the 0.38% increase in August.

The figures are a boost to Peru’s bid to wrestle inflation back to the central bank’s official target of 2%, plus or minus one percentage point.

The monetary authority kept its benchmark interest rate unchanged in August at 7.75% for the seventh month in a row after an aggressive series of hikes started in August 2021, part of its efforts to tame high consumer prices.

INEI said in a statement that inflation in September was driven by price rises in transportation, restaurants and hotels, and miscellaneous goods and services, which rose 0.56%, 0.43% and 0.32%, respectively.

The world’s second-largest copper producer has been grappling with poor weather, lower private investment in mining and anti-government protests staged earlier this year, which has led the government to slash its forecasts for economic growth.

(Reporting by Diego Ore in Mexico City and Jose Joseph in Bengaluru; Editing by Drazen Jorgic and Aurora Ellis)