Peru is celebrating a significant milestone as its inflation rate drops unexpectedly, reaching its lowest point since 2020. This positive development could potentially lead to further interest rate cuts by the central bank, boosting economic growth.
In September, consumer prices in Lima rose by 1.78%, falling below economists’ predictions of 2.09%. Peru now boasts the lowest inflation rate among major Latin American economies, along with the region’s lowest benchmark interest rate at 5.25%.
With the central bank aiming to keep annual consumer price increases at 2%, this target has been achieved for the first time in nearly four years. Prime Minister Gustavo Adrianzen shared the optimistic inflation figures, hinting at the possibility of economic growth exceeding expectations if the trend continues.
Following the country’s economic rebound from a recession in 2023, Peru’s Finance Ministry anticipates a potential economic expansion exceeding 3.2% in 2024. President Dina Boluarte’s government is urging the central bank to continue easing monetary policy to further boost recovery and growth.
Peru’s unique economic environment of low inflation and interest rates highlights its exceptional performance compared to other Latin American countries. The central bank’s upcoming interest rate decision is eagerly anticipated, considering the recent inflation data and positive economic outlook.
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