Macchu Picchu Peru

Peru GDP Q1 2021

Peru: Activity records fastest expansion since Q4 2018 in Q1

Economic activity rebounded in the first quarter of the year, with GDP expanding 3.8% in annual terms and contrasting the 1.7% contraction seen in the fourth quarter of last year. Q1’s reading marked the first quarter of growth after four consecutive contractions in 2020, with GDP increasing at the fastest rate in over two years.

The upturn was principally spearheaded by improving private consumption: Household spending bounced back in Q1, growing 2.2% year-on-year and marking the best reading since Q4 2019 (Q4 2020: -1.4% yoy). Nevertheless, the strength of the rebound was likely tempered by the stringent lockdown placed upon nearly half the population during much of January and February, which will have weighed on consumer spending during the period. Meanwhile, fixed investment growth accelerated to 34.9% in Q1 from 12.2% in the previous quarter, while government consumption growth moderated to 9.1% (Q4 2020: +21.5% yoy), dragging somewhat on the overall result.

In the external arena, exports of goods and services fell at a slower pace of 2.7% year-on-year in the first quarter, which marked the best reading since Q4 2019 (Q4 2020: -11.8% yoy). In addition, imports of goods and services bounced back, growing 3.3% in Q1 (Q4 2020: -5.8% yoy), marking the best performance in over two years. Consequently, the external sector deducted 1.5 percentage points from the overall print, softening from the 1.9 percentage-point subtraction in Q4 2020.

Meanwhile, on a seasonally-adjusted quarter-on-quarter basis, GDP contracted 0.2% in the first quarter, contrasting the previous period’s 8.5% growth.

Regarding the Q1 print and looking ahead to the rest of the year, Alberto Ramos and Daniel Moreno, economists at Goldman Sachs, commented:

“Political friction/uncertainty and the resurgence of Covid-19 cases which led to renewed restrictions on social mobility during Q1 weighed on the recovery, and we expect the still-high case growth through April and May as well as political risk leading up to the 6 June presidential run-off to continue to cap the strength of the recovery in Q2. Nevertheless, the high growth carry-over and the expected acceleration of economic activity in 2H2021 supported by a favorable external backdrop and improvement on the domestic healthcare situation should still lead to strong growth in 2021.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest