Peru’s annual inflation rate reached 7.96% in April, the highest level in 24 years, as the financial crisis engulfing the South American country continues to worsen.
The nation’s economy was already reeling from the Covid crisis, having experienced the worst deaths per capita in the world, and has been sent into a further downward spiral by rising food and energy costs as a result of Russia’s invasion of Ukraine.
As the world’s second-largest copper producer Peru has seen some benefits from rising commodity prices, but copper prices have risen at a slower pace than other commodities for which the country depends on imports, offsetting the benefits of the additional income.
Peru has been gripped by a series of protests over the cost of living crisis unfolding, with many households struggling to afford basic food. Some of these protests have disrupted business operations, further exacerbating problems.
The country’s INEI statistics institute said the 7.96% figure was the highest since May 1998. Monthly inflation lowered from the 26-year high set in March, but was still worryingly high at 0.96%.
Peru’s central bank has issued a sequence of rate hikes through the course of this year, with the country’s benchmark rate currently sitting at 4.5%, its highest level since 2009.
Peru’s government altered its growth outlook in light of the latest developments, reducing its projection from 4.8% to 3.6%.