Peru: Exports record sharpest contraction since July 2009
September 11, 2012
Weak global demand continues to dent the country's mineral exports. In July, exports plunged 19.5% over the same month last year to USD 3.4 billion. The reading, which represents the sharpest contraction since July 2009, came in well below the 14.2% drop recorded in June and marked the fourth consecutive monthly decline. The monthly print reflected a declined in overseas sales of traditional goods, particularly of minerals. Meanwhile, imports surged 23.2% in July (USD 3.6 billion), which contrasted the 1.0% drop recorded in the preceding month. As a result, the trade balance incurred a deficit of USD 192 million, which contrasted the USD 1.2 billion surplus recorded in the same month last year. The government expects overseas sales to fall from USD 46.3 billion in 2011 to USD 45.8 billion in 2012, which would represent a 1.0% drop. Meanwhile, Peru's Association of Exporters (ADEX) cut its export growth forecasts for this year and now expects shipments to contract 7.6%, which is below its previous estimate of a 2.8% decline. Lower overseas sales of traditional exports, particularly of minerals, were the main reason behind the change in the outlook.
Author: Ricardo Aceves, Senior Economist