Peru's inflation problem is not going away, and April's print made that clear. Consumer prices in Lima rose 4.01% from a year earlier - the highest in roughly two and a half years, after economists had penciled in a softer 3.70%.
This is the sixth consecutive monthly rise in annual inflation, which tells investors the print is not a one-off bad month.
Prices in Lima haven't run this hot since October 2023, when annual inflation hit 4.34%, and the latest reading puts Peru firmly outside the central bank's 1% to 3% target band.
The country had spent two full years keeping inflation below the upper end of that band, with the run ending in March when Peru posted its largest monthly price jump in 32 years.
The trigger was a stack of bad news landing at once - a domestic gas crisis, climbing global oil prices tied to the US-Iran war, and adverse weather hitting agricultural production across key growing regions.
April's monthly print told a slightly different story, with consumer prices rising 0.52% on the month - down sharply from March's 2.38% jump but still above the 0.22% economists had expected.
The headline monthly pace is cooling, even as the underlying pressure refuses to break.
The central bank held its benchmark rate at 4.25% in early April after inflation first topped the target band, taking a careful wait-and-see position rather than reacting to a single hot print.
Policymakers are now looking at a print firmly outside the target band, with month-on-month price pressure still tilted higher than economists had expected.
Cutting rates would risk letting inflation drift further from where the bank wants it, while holding or hiking would risk slowing an economy heading into a major political transition.
The 1% to 3% target band gives the bank room on either side of the 2% midpoint, and a six-month streak above the upper limit puts that flexibility under real pressure.
Peru votes in a presidential runoff in June, and the winner will become the country's tenth head of state since 2016.
Whoever takes office will inherit the loudest inflation problem the country has faced since 2023, with the central bank's next major rate decision landing into a freshly redrawn political map.
Food and fuel costs are showing up in voters' wallets exactly as candidates make their final pitches, which makes inflation the loudest issue on the campaign trail.
