Peru Economic Activity February 2018

Peru

Peru: Pace of economic expansion accelerates to over one-year high in March

April 19, 2018

Economic activity gained notable steam in March, increasing 3.9% year-on-year, much faster than the 2.9% annual growth rate observed in February. March’s result marked the third consecutive acceleration, following three successive months of softening growth in Q4 2017.

A supportive external sector and healthy domestic demand drove growth in March. Exports rose on the back of growing sales of mining, agricultural, metal-mechanical and chemical products to buyers abroad. The annual pace of export growth in March was robust, coming in at double-digit. On the domestic demand side, growth in retail sales gathered pace compared to the previous month, as did consumer credit. Moreover, soaring imports also signaled robust domestic demand.

Annual economic growth in March was generally broad-based, with the mining and hydrocarbons, agriculture, trade, transport, manufacturing and telecommunications sectors leading the way. However, shrinking public infrastructure spending weighed on the construction sector, which barely expanded in March. Moreover, the fishing sector contracted after two months of slight increases.

Consequently, annual average variation in economic activity came in at 2.7% in March, up from February’s 2.5%.

LatinFocus Consensus Forecast panelists expect GDP will expand 4.0% in 2018, which is down 0.1 percentage points from last month’s projection. For 2019, the panel expects the economy to grow 3.4%.


Author: Massimo Bassetti, Economist

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