Macroeconomic Forecast Peru

November 2006 | Macroeconomic Forecasts

Consumer price inflation continued on its downward trend in October. Inflation stood at 1.89% y-o-y, which is well within the Banco Central de Republica del Peru's (BCRP) target band of 1.5-3.5%. As such, we believe that the inflationary dynamics pose little threat to overall price stability and will allow the bank to keep its rate hikes on hold for the foreseeable future. Furthermore, due to this benign inflationary picture, we have revised our year-end inflation forecast downwards to 2.0% from 2.5%. Any slowdown in real GDP growth (expected to come in at 6.0% by year-end) might pose downside risks to

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