Andean Group - May 2011 (ISSN 1741-4466)

Real GDP grew 7.87% year-on year in March, and inflationary pressures continue to build. On 13 May the central bank increased its benchmark interest rate by 225 basis points to 4.25%, with the aim of limiting food price inflation. Julio Verlarde, the central bank president, warned of additional restrictive monetary policy measures. However, he also noted a slowdown, since March, in public and private expenditure. According to the national statistics institute, the consumer price index in Lima rose 0.68% month-on-month in April. Annual inflation was 3.34%, above the central bank's official target range of 1%-3%.

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