MercoPress. South Atlantic News Agency

Peru's inflation the highest in 13 years

The devaluation of the local sol against the US dollar played a part in Peru's annual inflation

Peru's inflation for 2021 has reached 6.43%, thus becoming the highest in the last 13 years and twice as high as the Government's target range, set at 3%. It was also over three times over 2020's annual record of 1.97%.

Peru's consumer price index (CPI) registered the highest increase in the last 13 years, closing 2021 at 6.43%, mainly due to price increases in rentals and fuels. The National Institute of Statistics and Informatics (INEI) explained the new figures stem from a 13.27% increase in housing, fuels and electricity, while food and beverages grew 7.97%.

In 2021, the CPI grew at a monthly rate of 0.52%, December being the highest month in the second semester with 0.78%. Monthly inflation of 1.01% in July was the highest in the year, followed by 0.98% in August.

The items with the strongest impact on annual inflation were propane gas for domestic use (51%), natural gas for housing (27%), residential electricity (11.6%) and home rentals (2.8 %).

Bottled vegetable oil rose 63.5%, Chinese onion 42.6%, parakeet fish 37.2%, Italian tomato 33.9%, corvina 26.6% and gutted chicken 24.3%.

Liquefied petroleum gas for motor vehicles increased 78%, airfares 59.4% for domestic trips and 39.4% for international travel, while interprovincial bus services rose 19.6%.

Tuition fell 18.9% because it was reduced to virtual activities, with no face-to-face practices since the start of the pandemic in March 2020.

The 6.43% was registered in Lima, while other cities showed higher increases, according to INEI: Chachapoyas 12.5%, Huaraz 11.9%, Puerto Maldonado 11.1%, Moquegua 10, 3%, Chiclayo 10.1% and Chimbote 10%.

Peru's Central Bank President Julio Velarde said inflation in December bounced back mainly due to the rise in the prices of imported goods and of the devaluation of the local currency against the US dollar. The Peruvian sol went down down 1.3% to an 18-year low of PS $ 3,63 / US $ 1.

For 2022, the Central Bank foresees inflation falling down to 2.9% and further again to 2.1% in 2023.