Peru Economic Activity October 2020


Peru: Economic activity records softest contraction since February in October

December 15, 2020

Economic activity dropped 3.8% year-on-year in October (September: -7.0% yoy). October's figure marked the best result since February. The reading reflected a broad-based improvement, with activity in the commerce, agricultural and construction sub-sectors all improving in October. Lastly, activity in the manufacturing, and mining and hydrocarbons sectors fell at softer rates than in the previous month.

On a monthly basis, economic activity increased 4.4% in October, which was notably better than September’s 1.9% expansion. Meanwhile, the trend pointed down, with the annual average variation of economic activity coming in at minus 10.6%, down from September's minus 10.1% reading.

Looking ahead, José Luis Nolazco, an economist at Credicorp Capital, sees a strong rebound in activity in 2021 tempered somewhat by heightened uncertainty:

“GDP is set to bounce between 9% and 12% in 2021. On the external side, terms of trade currently stand at a 92-month high (copper is almost at an 8-year high) and capital flows to emerging markets have returned. On the local side, the rebound of activity has been faster than initially anticipated, while broadly expansionary monetary and fiscal policies will remain. However, political, social and health uncertainty will continue to play an important role. GDP would bounce 15% in 2021 if there were no such fog.”

LatinFocus Consensus Forecast panelists estimate that GDP will expand 9.1% in 2021, which is down 0.2 percentage points from last month’s projection, and grow 4.2% in 2022.

Author:, Economist

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Peru Economic Activity Chart

Peru Economic Activity October 20 20

Note: Year-on-year changes of economic activity and annual average growth rate in %.
Source: Peru National Statistical Institute (INEI) and FocusEconomics calculations.

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