Peru Inflation Rate MoM: December 2025 Update and Macro Outlook
The latest inflation rate month-on-month (MoM) reading for Peru (PE) came in at 0.11% for December 2025, according to the Sigmanomics database. This figure marks a rebound from November’s contraction of -0.10% but remains below market expectations of 0.20%. This report reviews the recent inflation dynamics, compares them with historical trends, and assesses the broader macroeconomic implications for Peru’s economy, monetary policy, and financial markets.
Table of Contents
Peru’s inflation rate MoM edged up by 0.11% in December 2025, reversing the prior month’s 0.10% decline. This modest increase follows a volatile year marked by swings between positive and negative inflation readings. The 12-month average inflation rate MoM stands near 0.15%, reflecting moderate price pressures. The current inflation trajectory remains subdued compared to the April peak of 0.81%, signaling easing inflationary pressures in the medium term.
Drivers this month
- Shelter costs contributed 0.07 percentage points (pp), continuing steady upward pressure.
- Food prices rose by 0.04 pp, reflecting seasonal supply constraints.
- Energy prices remained stable, contributing negligibly to the inflation change.
Policy pulse
The 0.11% inflation MoM remains below the central bank’s target midpoint of 0.20% per month, suggesting limited immediate pressure for monetary tightening. The Banco Central de Reserva del Perú (BCRP) is likely to maintain a cautious stance, balancing inflation control with growth support.
Market lens
In the first hour after the release, the Peruvian sol (PEN) appreciated slightly against the US dollar, while 2-year government bond yields edged down by 5 basis points, reflecting market relief at the softer-than-expected inflation print.
Core macroeconomic indicators provide context for the inflation reading. Peru’s GDP growth forecast for 2025 remains steady at 3.20%, supported by robust mining exports and domestic consumption. Unemployment rates have stabilized near 6.50%, while wage growth has moderated to 3.10% YoY, limiting upward pressure on consumer prices.
Monetary Policy & Financial Conditions
The BCRP’s benchmark interest rate stands at 5.25%, unchanged since October 2025. Financial conditions remain accommodative, with credit growth at 6.80% YoY. Inflation expectations for 2026 hover around 2.80% YoY, close to the central bank’s 3% target, indicating anchored inflation psychology.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with a 2025 budget deficit projected at 3.50% of GDP. Increased public investment in infrastructure and social programs supports demand but poses upside inflation risks if supply bottlenecks persist.
External Shocks & Geopolitical Risks
Global commodity price volatility, especially in copper and oil, remains a key external risk. Recent geopolitical tensions in South America have had limited direct impact but could affect investor sentiment and capital flows.
Seasonal factors and base effects contributed to the recent uptick. The shelter component has steadily increased over the last six months, while food inflation remains sensitive to weather and supply chain disruptions. Energy prices have stabilized, limiting headline inflation spikes.
This chart reveals a trend of moderating inflation volatility, with the latest print signaling a tentative return to positive but controlled inflation. The data suggest that inflationary pressures are contained but require monitoring amid external uncertainties.
Market lens
Immediate reaction: The PEN/USD exchange rate strengthened by 0.15% within the first hour post-release, while 2-year sovereign yields declined by 5 basis points, reflecting market confidence in the central bank’s inflation management.
Looking ahead, Peru’s inflation trajectory depends on several factors. The baseline scenario (60% probability) projects steady inflation around 0.12% MoM, supported by stable commodity prices and moderate wage growth. The bullish scenario (20%) envisions inflation rising to 0.25% MoM if fiscal stimulus accelerates demand amid supply constraints. The bearish scenario (20%) anticipates inflation falling below 0% MoM if global commodity prices decline sharply and domestic demand softens.
Structural & Long-Run Trends
Long-term inflation trends in Peru have been characterized by gradual convergence toward the central bank’s 3% annual target. Structural reforms in labor markets and productivity gains are expected to keep inflation expectations anchored. However, demographic shifts and urbanization may increase demand-side pressures over the next decade.
External Risks
Potential shocks include renewed geopolitical tensions affecting commodity exports and global financial tightening that could raise borrowing costs. These risks could push inflation outside the central bank’s comfort zone, prompting policy adjustments.
Peru’s December 2025 inflation rate MoM of 0.11% signals a cautious return to positive inflation after a brief contraction. The data reflect a balanced macroeconomic environment with moderate price pressures and stable monetary policy. While upside risks from fiscal expansion and external shocks exist, the central bank’s credible framework and anchored expectations provide a buffer against runaway inflation.
Investors and policymakers should monitor commodity price trends, wage dynamics, and geopolitical developments closely. The inflation outlook remains manageable but sensitive to both domestic and external shocks. Maintaining policy flexibility will be key to navigating the evolving landscape.
Key Markets Likely to React to Inflation Rate MoM
Peru’s inflation rate MoM influences several key markets, including local currency, sovereign bonds, and commodity-linked equities. The Peruvian sol (PEN) typically responds to inflation surprises, while government bond yields adjust to changing inflation expectations. Additionally, copper-related stocks and forex pairs tied to commodity exporters are sensitive to inflation dynamics.
- PENUSD – The Peruvian sol’s exchange rate versus the US dollar reacts directly to inflation data and monetary policy outlook.
- SCCO – Southern Copper Corporation’s stock price correlates with Peru’s inflation and commodity price trends.
- BHP – BHP Group’s shares are sensitive to inflation-driven commodity price fluctuations impacting Peru’s mining sector.
- USDPEN – The inverse of PENUSD, reflecting currency strength and inflation expectations.
- BTCUSD – Bitcoin often reacts to inflation trends as an alternative store of value amid currency volatility.
Inflation Rate MoM vs. PENUSD Exchange Rate Since 2020
| Year | Average Inflation MoM (%) | PENUSD Annual Change (%) |
|---|---|---|
| 2020 | 0.18 | -3.50 |
| 2021 | 0.22 | -1.20 |
| 2022 | 0.25 | 2.80 |
| 2023 | 0.14 | -0.50 |
| 2024 | 0.12 | 1.00 |
| 2025 (YTD) | 0.15 | 0.80 |
This table highlights a moderate inverse correlation between inflation rate MoM and PENUSD exchange rate movements. Periods of rising inflation often coincide with a weaker sol, reflecting inflation’s impact on currency valuation.
FAQs
- What is the latest inflation rate MoM for Peru?
- The most recent inflation rate MoM for Peru is 0.11% as of December 2025, showing a slight increase from November’s -0.10%.
- How does the inflation rate MoM affect Peru’s monetary policy?
- Inflation below the central bank’s target reduces pressure for rate hikes, supporting a cautious monetary stance to balance growth and price stability.
- What are the main risks to Peru’s inflation outlook?
- Key risks include volatile commodity prices, fiscal stimulus effects, and geopolitical tensions that could disrupt supply chains or investor confidence.
Takeaway: Peru’s December inflation MoM rebound to 0.11% signals contained price pressures amid a balanced macroeconomic backdrop, with risks tilted slightly to the upside due to fiscal and external factors.
The December 2025 inflation rate MoM of 0.11% marks a rebound from November’s -0.10% and remains below the 12-month average of approximately 0.15%. This reflects a partial recovery after two consecutive months of subdued inflation.
Historical comparisons show that the April 2025 peak of 0.81% was an outlier driven by transitory supply shocks. Since then, inflation has oscillated, with negative prints in June (-0.06%) and September (-0.29%), highlighting the volatility in Peru’s inflation dynamics.