Peru: Economic activity maintains the pace in May
July 22, 2011
In May, economic activity expanded 7.1% over the same month last year, which was slightly below the 7.4% increase observed in April and was in line with market expectations. The monthly expansion represented the slowest pace since February 2010. The weaker reading was mainly the result of slower growth in manufacturing (April: +9.2% year-on-year; May: +5.1 yoy) and trade (April: +9.2% year-on-year; May: +8.8 yoy). A month-on-month comparison, confirms the slowdown suggested by the annual figures, as economic activity dropped a seasonally adjusted 1.26% over the previous month, contrasting April's 2.11% increase. As a result of the monthly deceleration, the trend continues to point to a moderation in economic activity, with the annual average variation in economic activity edging down from 9.2% in April to 9.0% in May, which marked the slowest pace of growth since December 2010. The Central Bank anticipates that the economy will grow 6.5% this year. For 2012, the Bank expects the economy to maintain the same pace. Meanwhile, incoming Finance Minister Luis Miguel Castilla stated that in order to restore investors' confidence and implement well-designed social programs, the new government aims to maintain growth rates above 6%.
Author: Ricardo Aceves, Senior Economist