Peru consumer prices slow in September to lowest since 2020

LIMA, Oct 1 (Reuters) - Peru's inflation in September surprised analysts as it slowed to below 2% for the first time in four years, according to data released on Tuesday, increasing the odds that the nation's central bank will extend a streak of interest rate cuts.

Annual inflation came in at 1.78% in September, backed by dropping prices of food and beverages and transport, data from the national statistics agency INEI showed.

September inflation came in under the central bank's mid-point for its 1% to 3% target range, and follows 2.13% inflation in July and 2.03% in August.

Last month, Peru's central bank trimmed the benchmark interest rate for the second time in a row to 5.25%.

Year-over-year, prices of food and beverages fell nearly 1% while transport costs were down 0.4% in September. Prices in the hospitality sector and miscellaneous goods and services inched up 0.2%.

Consumer prices fell 0.24% from August to September, under the estimated 0.07% increase in prices from analysts polled by Reuters.

So far this year, prices in the world's third-largest copper producer have climbed 1.86%, according to INEI.

The Andean nation has shown signs of recovery in recent months after slipping into a recession amid social unrest. Peru's economy is expected to grow 3.1% this year. (Reporting by Marco Aquino, Natalia Siniawski and Aida Pelaez-Fernandez; Editing by Louise Heavens, Kylie Madry and Aurora Ellis)