Peru: GDP picks up in the fourth quarter as Peruvian economy continues to perform strongly
March 10, 2016
Peru’s economy gained steam in the fourth quarter, as the economy continues to weather external headwinds well. GDP expanded a notable 4.7% in Q4 over the same quarter of last year, which met market expectations and marked the best result since Q1 2014 (Q3: +3.2% year-on-year). While many economies in Latin America have been suffering from low prices for commodities subdued trade volumes, Peru has managed to buck this trend in the fourth quarter as booming exports supported growth.
Exports of goods and services grew a notable 9.7% in Q4, which marked the best result in almost four years (Q3: +3.7% yoy). Although copper prices are languishing at low levels, a surge in output as new mines began producing drove the notable expansion. Meanwhile, imports also accelerated from Q3’s 1.5% increase to a 2.5% expansion. Overall, the external sector’s net contribution to growth picked up from 0.6 percentage points in Q3 to 1.8 percentage points.
On the domestic side of the economy, Private consumption remained steady at Q3’s 3.4% increase. Government consumption increased 12.8%, up from Q3’s 6.5%. Meanwhile, total investment contracted 2.9% in Q4, which was a deterioration from the 0.8% decrease in Q3, while fixed investment fell 1.0% (Q3: -4.2%).
Sequential data show that GDP in Q4 grew 1.0% over the previous quarter, which followed Q3’s 1.1% increase. For the full year 2015, the economy grew 3.3%, which was above 2014’s 2.4%.