January 18, 2011 / 10:25 PM / 10 years ago

UPDATE 1-Peru finmin sees global prices hitting inflation

* Minister says some impact on inflation unavoidable

* Central bank raised interest rates this month (Adds quote from finance minister, background)

LIMA, Jan 18 (Reuters) - Peru’s Finance Minister Ismael Benavides said on Tuesday that high international food and energy prices will impact inflation in Peru.

Peru’s central bank raised its benchmark interest rate earlier this month in a surprise move to 3.25 percent from 3 percent to curb inflation expectations but has said the move did not necessarily mean consecutive hikes in coming months.

“When prices remain high for such a long time, they will affect prices for consumers,” Benavides told Reuters. “There will be some impact on inflation in Peru in the next few months, it’s not something we can avoid.”

Inflation has been relatively mild in Peru despite surging economic growth and this year is forecast to fall within the central bank’s target range of between 1 percent and 3 percent.

Inflation last year was 2.08 percent and Peru has seen some of the lowest price increases in Latin America over the past few years.

Peru imports most of its wheat, which in 2008 caused local inflation to accelerate.

Benavides also said the country’s economic growth rate for December 2010 will be high, though slightly less than in November. The economy grew 9.98 percent in November from the same period a year ago.

Peru is among the world’s fastest growing emerging markets, enjoying a boom driven by domestic construction, manufacturing and lending activity. Construction has outpaced mining as the country’s main economic engine and source of employment. (Reporting by Patricia Velez; Writing by Caroline Stauffer; Editing by Kenneth Barry)

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