"The central bank's message is a message of caution, the good news is that we are seeing inflation is beginning to subside, but it is too early to claim victory, far from it," said the bank's head of economic studies unit, Adrian Armas.
Peru's annual inflation rate slowed to 7.97% in April, still well ahead of the bank's 1%-3% target range. The bank has predicted inflation will return to its range by the fourth quarter.
The world's No. 2 copper producer had been among the fastest-growing economies in the region, but its stability is threatened by an extended political crisis that escalated with the ouster and arrest of former President Pedro Castillo last December.
Economic activity has also been hurt by heavy rainfall and the impact of bird flu outbreaks on its agricultural sector.
Earlier this week, Central Bank President Julio Velarde said the economy may have contracted over the first three months of 2023, though the most likely scenario is for no growth at all.
The bank has predicted economic growth of 2.6% this
year, rising to 3.0% in 2024. Velarde said economic growth
should help reduce the country's worrying poverty rates.
(Reporting by Marco Aquino and Sarah Morland; Editing by
Anthony Esposito)
