LIMA (Reuters) – Analysts and market participants in Peru raised their expectations for the Andean country’s 2022 inflation on Friday, a monthly central bank survey showed, saying they now forecast an increase of between 6.5% and 7.5%, against a 6% to 7% rise previously projected.
Annual inflation in Peru, the world’s second-largest copper producer, reached 8.74% last month, its highest level since July 1997, driven by soaring food and energy prices on the back a global prices spike related to the Ukrainian war.
In a bid to rein in high consumer prices, Peru’s central bank has been hiking interest rates – in July, it raised the country’s benchmark rate by 50 basis points to 6%, a 13-year high. Peru’s annualized inflation target ranges from 1% to 3%.
The latest poll also showed that market participants in the country expect the local economy to expand 2.5% to 3% this year, a range similar to the one seen in the previous survey. The central bank itself sees the local economy growing 3.1% in 2022, after a 13.3% jump in 2021.