Macroeconomic Forecast Peru

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Headline consumer price inflation (CPI) remained negative on a month-on-month basis in September, falling by 0.1%. This saw the year-on-year headline inflation rate continue to decline from 1.9% in August, and 2.7% back in July, to just 1.2% in September. Looking at wholesale price inflation, we see further signs that the Peruvian economy is in deflation. With the exception of July when month-on-month price growth was flat, the index has been falling in every single month since November 2008. Moreover, the year-on-year reading has been negative since May, with wholesale prices falling 6.2% y-o-y in September. We are currently forecasting wholesale price inflation of -9.0% by end-2009.