Peru’s July Consumer Prices Rise 0.09% on Food, Transport

Peru’s consumer prices rose 0.09 percent last month, the national statistics agency said today.

The median estimate of 14 analysts surveyed by Bloomberg was for 0.11 percent price rise after a 0.04 percent decline in June. Annual inflation was 3.28 percent, compared with the median estimate of 3.36 percent from 10 economists surveyed by Bloomberg. The annual inflation rate in June was 4 percent.

Peru’s central bank has kept its key interest rate unchanged at 4.25 percent for 14 straight months as inflation eases and the economy expands at the fastest pace in Latin America. Any change in monetary policy probably will hinge on the evolution of Europe’s debt crisis and China’s deceleration and their impact on Peru’s economy, analyst Hugo Perea said.

“The central bank will continue in a wait-and-see mode,” Perea, chief economist for Peru at BBVA Research in Lima, said by phone yesterday. “Internal demand is very solid, so in that respect you don’t have to reduce rates. While inflation has been above the upper limit of the target range, in coming months it will show a downward trend.”

Policy makers target inflation of 1 percent to 3 percent.

Gasoline prices fell 6 percent in July while bus fares jumped 12 percent and food and beverages rose 0.3 percent, the agency said in today’s e-mailed statement.

To be sure, a drought in the U.S. poses a threat to consumer prices in Peru, where food and drink products constitute 28.5 percent of the inflation index, Perea said. The government’s index is based on a survey by the statistics agency of businesses in the Lima Metropolitan area.

Corn futures for December delivery settled at $8.0525 a bushel at 2 p.m. on the Chicago Board of Trade yesterday after earlier touching an all-time high of $8.205.

Peru will post the fastest economic growth among major Latin American economies this year, expanding 5.7 percent, according to the median estimate of five analysts surveyed by Bloomberg.

Latin American gross domestic product will climb 3.07 percent in 2012, exceeding the global average of 2.23 percent, according to the survey.

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