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Peru Private consumption

Peru Private consumption

Private Consumption in Peru

The Peruvian economy recorded an average growth rate of 3.3% in private consumption over the decade to 2022, above the 1.8% average for Latin America. In 2022, private consumption growth was 3.6%. For more private consumption information, visit our dedicated page.

Peru Private consumption Chart

Note: This chart displays Private Consumption (annual variation in %) for Peru from 2014 to 2023.
Source: Central Reserve Bank of Peru.

Peru Private consumption Data

2018 2019 2020 2021 2022
Private Consumption (ann. var. %) 3.8 3.2 -9.9 12.4 3.6

GDP records sharpest contraction since Q4 2020 in the third quarter

GDP dropped at a quicker rate of 1.0% year on year in the third quarter, below the 0.5% contraction tallied in the second quarter. Q3's reading marked the worst since Q4 2020. On a seasonally adjusted quarter-on-quarter basis, GDP fell 0.1% in Q3, matching the previous quarter's contraction.

Household spending contracted 0.1% in Q3, marking the worst result since Q4 2020 (Q2: +0.4% yoy), as continued social unrest weighed on consumer sentiment and still-elevated inflation dented purchasing power. Government spending accelerated somewhat to a 2.8% expansion in Q3 (Q2: +2.7% yoy). Meanwhile, fixed investment declined at a milder albeit still-considerable rate of 5.9% in Q3, from the 6.5% decrease recorded in the prior quarter, restrained by shrinking mining and non-mining private investment and a downturn in sub-national public investment.. On the external front, exports of goods and services growth decelerated to 0.4% in Q3 (Q2: +7.0% yoy), due to lower shipments of non-traditional textile, agricultural, livestock and fishery products. Meanwhile, imports of goods and services contracted 1.8% in Q3 (Q2: -3.0% yoy), constrained by lower purchases of industrial inputs, capital goods and non-durable consumer goods amid lower manufacturing activity and private spending.

GDP should grow at a significantly faster pace next year compared to 2023. Declining inflation and looser financing conditions will translate into a faster expansion in household spending and a rebound in investment activity. That said, El Niño-associated weather events and lingering political uncertainty pose downside risks.

Commenting on the outlook, analysts at Itaú Unibanco stated: “Our 2023 GDP growth forecast of 0.2% has a downward bias given a weaker than expected Q3 2023. Activity will likely recover in Q4 2023, although at a moderate pace. Authorities expect a moderate/strong el Niño scenario for 1Q24 which will likely slow the expected recovery, resulting in a 3.0% growth rate for the year.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Peruvian private consumption projections for the next ten years from a panel of 27 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Peruvian private consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Peruvian private consumption projections.

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