Living in Peru : your everyday companion

Peru inflation rate questioned - Gasoline prices to continue increasing

Living in Peru
Israel J. Ruiz

The July reduction of fuel subsidies in Peru could also affect the price of gasoline and diesel in the country in August, estimated the head of the Central Reserve Bank Julio Velarde, explaining this would in turn increase inflation.

Just hours after Peru's government announced it had reduced fuel subsidies in mid-July, 70 percent of Lima's gas stations increased their prices between 0.64 and 1.01 soles.

Public transportation companies are also evaluating whether to increase fares.

According to Velarde, the government's cut on fuel subsidies could also affect gas station prices in August, which could push bus fares up and increase the country's monthly and annual inflation rate.

"Last year the inflation rate was 0.14 percent, meaning that any number above that will elevate the annual rate and be higher than the level obtained in July," affirmed Velarde, stating he did not dare guess how much it could increase.

"We have to see how much buses increase their fares."

Furthermore, during a presentation to the congressional economic council, the head of Peru's Central Reserve Bank expressed his concern on how inflation was measured in the Andean country.

He claimed that the current system used by the National Statistics Institute (INEI) was not exact.

"We have doubts about the methodology but we have to use it by law," said Velarde, asking the economic council to improve the methods used to measure inflation.

The country's national inflation rate is based on how much prices rise or fall in Lima.

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# Alan Garcia says :
21 August, 2008 [ 22:20 ]

Cutting fuel subsidies can only be a good thing. With higher public transportation costs the poor won't be able to move around and cause trouble. Hopefully they'll all die off soon - especially those sitting on natural resources.

# carl says :
22 August, 2008 [ 06:16 ]

cut subsidies, and also cut the sales taxes 19% is too much.

# Splaktar says :
22 August, 2008 [ 08:18 ]

"Public transportation companies are also evaluating weather to increase fares."

I hope there is no snow in the forecast!

"The country's national inflation rate is based on how much prices rise or fall in Lima."

Nice to see that the provinces are completely ignored.  All of the people who live there are useless anyway.  Lima IS Peru, anything else is just Lima's trash!

# christine schmidt says :
27 August, 2008 [ 16:08 ]

found in "the economist " under country briefing PeruPeru-
Angry down south Jul 10th 2008 | PUNO
From The Economist print edition

Would-be populists everywhere

 LAST year the economy grew by 9% and poverty fell by five percentage points. But many Peruvians feel their lot is not improving fast enough. That is especially so in the country’s southern Andes. On July 8th-9th trade unions staged a general strike, claiming the government had reneged on various promises. While having little impact in Lima, the strike was widely backed in southern towns, with protesters blocking roads and the railway to the Inca ruins at Machu Picchu. Earlier this month miners struck to demand a bigger share of bumper mining profits. In the same cause a group in the southern department of Moquegua last month took scores of police hostage and burned government offices. But it is to Puno, a poor and remote region of 1.3m on the border with Bolivia, that those Peruvians who fear an impending populist shift look most closely. The head of its regional government, Hernán Fuentes, clashes regularly with Peru’s president, Alan García. He has attempted to legalise production of coca, the shrub from which cocaine is extracted. He is pushing for sweeping local autonomy. He is a fan of the socialist nationalism pursued by Venezuela’s Hugo Chávez and Bolivia’s Evo Morales, while abhorring Mr García’s economic liberalism. The president and Mr Fuentes accuse each other of failing to implement government measures to help Puno, such as laws to create a second university there and a free-trade zone. “We are like oil and water,” Mr Fuentes says. “We have different ideas about Peru’s political, economic and social future.” Mr Fuentes was elected for a small party headed by Antauro Humala, a former army officer who staged an attempted coup against the democratic government in 2005, an incident in which five people were killed. Mr Humala’s elder brother, Ollanta, narrowly lost the presidential election to Mr García despite—or rather because of—having noisy backing (and probably money) from Mr Chávez.It is Mr Fuentes’s ties with Mr Chávez, real or not, which cause alarm in Lima. He set up several Casas de ALBA, centres which promote friendship with Venezuela and send patients at its expense for free cataract operations there. Venezuela denies paying for these centres’ political activities, and Peru’s government has found no evidence of this. But Peru’s Congress is conducting its own investigation.Mr Fuentes insists this will find nothing. Rather than from his antics, a populist threat in Peru at the next election in 2011 may once again come from Ollanta Humala. He is doing his best to appear moderate. But his proposal to increase the taxes on mining and oil companies commands widespread popular support.

(my short add- this article should be a weak up   call to react strongly on social demands, institutional reforms especially in justice – because really serious money only goes were it feels save  , fight against corruption and against mediocrity and some journalists who used press freedom to serve in particular private interests and manipulate public opinion against the demand of a majority of Peruvians.
The really numbers of inflation are much more higher than last year- in province a can of milk costs now 3 soles- 2 years before 1. 50 and so on - and it was very long time known that an economical storm was coming up internationally which according to economical analysts will last until 2009

For the international events no one can blame local politicians-
surely they can be blamed for not having taking care in advance and getting the country prepared. they had enough warnings about it.
the civil uprisings in some areas of Peru don’t come only in consequence of mister Chavez influence – they seem to be also a result of ongoing mismanagement of countries richness, corruption  a lock of creative economic politics in attracting  job giving investment in rural areas an possible incapacity from some of the responsible persons who are taking mayor decisions.

 

 

# christine schmidt says :
29 August, 2008 [ 16:29 ]

- down a today newspaperarticle
anyone who wants to goe on papa business on my roof ? is this a joke- it must be a joke- it must it must- because if it is not a joke than we might have a slight problem here.

Velarde recomienda sembrar hortalizas para generar ahorro

# Phillip says :
24 September, 2008 [ 11:11 ]

RENEWABLE POWER = PERUVIAN POWER

http://nigelwintergreen.blogspot.com/2008/02/peru-peruses-alternative-energy_26.html