Peru: The rate of expansion in economic activity decelerates notably in June after two months of growth euphoria
August 16, 2018
Economic activity expanded 2.0% year-on-year in June, well below May’s 6.4% increase and moving further away from April’s annual growth rate of 7.8%, which was a five-year high. National production in the January–June period, meanwhile, rose by 4.3% from the same period in 2017.
A solid expansion in exports of non-traditional products and robust domestic demand drove growth in June, although both grew at a softer pace than in the previous month. Non-traditional exports rose on the back of growing sales of fishing, agriculture, textiles and chemical products to buyers abroad. Moreover, in the group of traditional products, exports of iron, silver, zinc, gold and natural gas recorded strong increases. On the domestic demand side, retail sales expanded solidly, while consumer credit growth remained strong.
In terms of productive sectors, almost all sectors continued to expand, albeit at a much slower pace than in May. Decelerations were particularly sharp in the manufacturing, construction and transport sectors. Moreover, the mining and hydrocarbons, and fishing sectors swung from annual expansions in May to year-on-year contractions in June.
Consequently, annual average variation in economic activity came in at 3.2% in June, down from May’s over one-year high of 3.4%.
Peru GDP Forecast
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 sees the economy growing 3.4%.