Peru: Economy accelerates in Q4 on the back of a strong restocking process
February 24, 2014
GDP expanded 5.1% over the same quarter of the previous year in Q4, which was up from the 4.5% increase observed in Q3. The reading marked the strongest expansion since Q2 2013, but came in just under the 5.2% expansion the market had expected. On a quarterly basis, GDP expanded a seasonally-adjusted 1.4% in Q4, which followed the 1.2% increase tallied in Q3.
Domestic demand was the main driver behind the expansion. Growth in private consumption remained healthy in Q4, expanding 5.0% year-on-year (Q3: +5.1 year-on-year). Government spending expanded 4.1% annually in Q4, which was a deceleration compared to the 7.5% expansion tallied in Q3. Total investment expanded 4.3% over the same period of the previous year, which was up from the 1.2% expansion tallied in Q3. Fixed investment, however, decelerated in Q4, having expanded just 1.8% (Q3: +4.6% yoy). With an expansion in total investment and a deceleration in fixed investment, GDP benefited from a strong restocking process in Q4.
On the external front, exports of goods and services rose 3.1% over the same quarter last year in Q4 (Q3: +5.3% yoy). Meanwhile, imports expanded 1.6% in Q4, which was down from the 3.4% rise registered in the Q3. The external sector's net contribution to overall economic growth remained at plus 0.2 percentage points in the fourth quarter.
In the full year 2013, GDP expanded a healthy 5.0%, which, nevertheless, represented a deceleration over the 6.3% expansion in 2012.
In its December 2013 inflation report, the Central Bank projected that the economy would expand 6.0% in 2014. For 2015, the Bank sees the economy expanding 6.5%. LatinFocus Consensus Forecast panelists expect GDP to expand 5.4% this year, which is down 0.1 percentage points from last month's projection. For 2015, the panel expects the economy to grow 5.6%.