Fuel costs drove the monthly increase, with gasohol climbing 5.8% and diesel advancing 3.9% in September alone. Transport services recorded a 0.26% monthly rise, while taxi fares increased 0.9%. Over the January-September period, vehicle fuels and lubricants surged 40.4%, contributing roughly 3.5 percentage points to the annual inflation figure. The spike reflects higher international oil prices tied to Middle East supply disruptions, compounding domestic cost pressures.
Food prices showed divergent behavior. The overall food and non-alcoholic beverages division fell 0.07% in September as fish prices dropped sharply—bonito declined 15.6% and perico 15.7%—along with eviscerated chicken down 4.6% and mango down 19%. These declines offset spikes in vegetables and staples: tomatoes jumped 28.92%, green peas 18.54%, corn 16.81%, and brown sugar 16.19%. INEI attributed the vegetable increases to supply disruptions from water deficits, pests, and unseasonable rains affecting specific crops.
The construction materials index climbed 0.57% in September, led by metallic products including steel rebar, wire, and tubes, alongside brick prices rising due to accumulated production costs. Restaurant and hotel prices also edged up 0.19%.
Phase Consultores director Juan Carlos Odar raised his 2026 year-end inflation forecast to 4.8%, noting the figure will finish closer to 5% than 4%. The Instituto Peruano de Economía projects 4.5% for 2026, moderating to 2.6% by end-2027. The BCRP, which kept its benchmark rate at 4.25% for the twelfth consecutive month in September, now faces mounting pressure to act. Governor Julio Velarde stated the bank will not rule out a rate hike in coming months, contingent on El Niño’s evolution. The weather phenomenon, expected to persist through mid-2027, threatens key export crops in Tumbes, Piura, and Lambayeque—regions that produce lime and mango—potentially tightening food supply and lifting prices further.
An interest-rate increase would raise borrowing costs across consumer loans, credit cards, and small-business lines, with mortgage rates adjusting more gradually. For BBVA Perú and other Spanish-owned subsidiaries, higher rates could widen net interest margins but also elevate delinquency risk as household budgets tighten, forcing additional provisioning. Agricultural portfolios face particular vulnerability if El Niño damages harvests, mirroring stress seen in previous episodes.
This article was curated and published as part of our South American energy market coverage.
