Peru Consumer Prices Fall Sharply to Seven-Year Low in August

Inflation in Peru's capital, Lima, unexpectedly fell in August 2025, with consumer prices declining 0.29% month-on-month, contrary to forecasts of a slight increase. The annual inflation rate dropped to 1.11%, the lowest since 2018 and nearing the lower bound of the central bank's 1%–3% target range. Key contributors to the monthly decline included decreases in food and non-alcoholic beverage prices, housing and utilities, and transportation costs. This marks the sharpest monthly inflation decline in nearly a year for Lima, although the central bank expects inflation to rise to around 1.8% by the end of 2025. Meanwhile, Indonesia also experienced deflation of 0.08% in August 2025, driven mainly by lower prices in food, beverages, tobacco, clothing, and transportation. Despite some price declines, Indonesia's annual inflation remained at 2.31%, with increases in core inflation components such as tuition fees and jewelry prices.