Macroeconomic Forecast Peru

BMI View: Inflation came in at 4.7% in 2011 in Peru according to recently released data by the country's central bank, which was higher than our 3.3% estimate for 2011. Inflation came in much higher than the central bank's 1.0-3.0% target range on the back of a rise in commodity prices (the average price of Brent Crude rose by 36.5% in 2011). We are however happy to sit with our 3.2% year-end forecast for 2012 due to our expectation of a moderation of energy prices and a slowing of real GDP growth from 6.7% in 2011 to 5.8% in 2012. Inflation print in 2012 will also be helped by base effects given the 2011 elevated figure.

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