Peru's annual inflation rate was 2% in August 2024, placing it in the middle of the target range. With the August result, 27 years and seven consecutive months have been achieved with a single-digit inflation rate, the
"Compared to other South American countries and Mexico, Peru has recorded the longest period of single-digit inflation since January 1951. It is followed by Chile, Mexico, Colombia, and Ecuador with shorter periods of low inflation," the issuing entity explained on Thursday.
Longest period of single-digit inflation
The BCR pointed out that since 1997 Peru has achieved the longest period of inflation below 10% since 1901, when statistics on this variable became available.
Similarly, the issuing entity indicated that the second-longest period of single-digit inflation in the country was observed between 1921 and 1940.
The BCR explained that this long period of single-digit inflation —which began in February 1997— contrasts with the era when prices increased at annual rates of two, three, and even four digits during the hyperinflation of the late 1980s.
Thus, between August 1987 and August 1990, the cumulative inflation rate was 3,500,000%. In this century, Peru is the country with own currency that has the lowest inflation in the region, below 3%.
"A low inflation rate protects the purchasing power of families and reduces uncertainty, which favor investment and economic growth," the issuing entity emphasized.
"A crucial factor in maintaining monetary stability has been the Central Reserve Bank's autonomy, enshrined and perfected in the 1993 Constitution. (According to) Article 84, the Central Bank is a legal entity under public law; it has autonomy within the framework of its Organic Law," the BCR indicated.
Since 2002, the
Central Reserve Bank has
adopted the Explicit Inflation Targeting Scheme, with an inflation target range between 1% and 3%.
"Inflation in the country has occasionally exceeded the target range temporarily due to supply shocks, such as rising food and fuel prices or currency depreciation," the entity said.
"In these cases, the Central Bank has implemented measures to prevent these transitory factors from being reflected in inflationary expectations, which have remained within the target range for 77% of the months since the Explicit Inflation Targeting Scheme was adopted," it pointed out.