Macroeconomic Environment
A N N U A L R E P O R T / B C R P 2 0 0 7
CENTRAL RESERVE BANK OF PERU
13
GRAPH 1
Overall inflation and food and beverage inflation in December 2007
(Las 12-month percentage change)
Data on inflation in China and Germany refers only to food.
Source: Bloomberg.
12.0
15.2
16.7
8.5
6.2
10.8
6.6
4.8
6.1 6.0 5.7 5.4
8.4
7.8
6.5
5.7
5.1 4.5 4.2 4.1 3.9 3.8
2.8
2.1
Turkey Chile China Colombia India Brasil Spain USA Peru Mexico Germany England
Total Food and Beverages
In 2007 economic activity in Peru continued to show a robust growth mainly due to the dynamic performance of domestic demand, particularly private consumption and private investment, in a context of positive business and consumer expectations and surpluses in both the fiscal accounts and in the current account of the balance of payments.
In contrast, the external scenario was characterized by increased uncertainty in international financial markets as a result of the mortgage crisis in the United States and the price rises in foodstuffs and petroleum which, together with a greater weakening of the dollar, generated strong inflationary pressures worldwide.
These external factors had a strong impact on domestic inflation –measured by the
Consumer Price Index (CPI) of Lima Metropolitana– which reached 3.9 percent in 2007, the highest inflation rate observed in the country since 1998.
It is worth pointing out that Peru recorded the third lowest inflation rate in Latin America after Ecuador (2.7 percent) and Mexico (3.8 percent), and that Chile, China, Taiwan,
United States, Singapore and Japan showed in 2007 the highest inflation rates of the last ten years, while inflation in the Eurozone (3.1 percent) reached the highest level since this region was created.
This higher inflation rate in Peru was mainly due to the effect of the higher prices of foodstuffs and imported inputs (wheat, maize, soybean oil, and petroleum), as reflected in the rate of
CENTRAL RESERVE BANK OF PERU
13
GRAPH 1
Overall inflation and food and beverage inflation in December 2007
(Las 12-month percentage change)
Data on inflation in China and Germany refers only to food.
Source: Bloomberg.
12.0
15.2
16.7
8.5
6.2
10.8
6.6
4.8
6.1 6.0 5.7 5.4
8.4
7.8
6.5
5.7
5.1 4.5 4.2 4.1 3.9 3.8
2.8
2.1
Turkey Chile China Colombia India Brasil Spain USA Peru Mexico Germany England
Total Food and Beverages
In 2007 economic activity in Peru continued to show a robust growth mainly due to the dynamic performance of domestic demand, particularly private consumption and private investment, in a context of positive business and consumer expectations and surpluses in both the fiscal accounts and in the current account of the balance of payments.
In contrast, the external scenario was characterized by increased uncertainty in international financial markets as a result of the mortgage crisis in the United States and the price rises in foodstuffs and petroleum which, together with a greater weakening of the dollar, generated strong inflationary pressures worldwide.
These external factors had a strong impact on domestic inflation –measured by the
Consumer Price Index (CPI) of Lima Metropolitana– which reached 3.9 percent in 2007, the highest inflation rate observed in the country since 1998.
It is worth pointing out that Peru recorded the third lowest inflation rate in Latin America after Ecuador (2.7 percent) and Mexico (3.8 percent), and that Chile, China, Taiwan,
United States, Singapore and Japan showed in 2007 the highest inflation rates of the last ten years, while inflation in the Eurozone (3.1 percent) reached the highest level since this region was created.
This higher inflation rate in Peru was mainly due to the effect of the higher prices of foodstuffs and imported inputs (wheat, maize, soybean oil, and petroleum), as reflected in the rate of