Peru: GDP holds ground amid strong private consumption and export recovery
November 24, 2015
GDP expanded 2.9% in Q3 over the same quarter of last year. The result was broadly in line with the 3.0% increase observed in Q2, which had marked the strongest growth in five quarters. The Q3 result fell just short of market expectations of a 3.0% rise and reflects that stronger private consumption and a recovery in export growth made up for a pullback in government spending and falling investment.
Domestic demand grew 2.5% in Q3, which was just below the 2.7% increase tallied in Q2. Private consumption expanded 3.4% in Q3 (Q2: +3.3% year-on-year). Government spending expanded a solid 4.2% annually in Q3, although this was well below the 9.1% increase tallied in Q2. Total investment contracted 0.3% in Q3, which followed the 1.1% decrease in Q2. Total investment was dragged down by fixed investment, which fell 4.5% (Q2: -9.3% yoy).
On the external front, exports of goods and services in Q3 expanded 2.9% over the same quarter last year (Q2: +0.7% yoy). Exports had not increased this much since Q1 2014. Increased output in the mining sector, despite weak external demand, helped buoy export growth in Q3. Meanwhile, imports increased 1.3% in Q3, which contrasted the 0.4% decrease registered in Q2. Consequently, the external sector’s net contribution to overall economic growth improved from 0.2 percentage points in Q2 to 0.4 percentage points in Q3.
Sequential data show that GDP in Q3 grew 0.6% over the previous quarter, which was below the 1.1% increase observed in Q2.
Author: Carl Kelly, Economist