Peru: Economic activity picks up in August
October 23, 2011
In August, economic activity expanded 7.5% over the same month last year, which was faster than the 6.5% increase observed in July and overshot market expectations that had economic activity maintaining the pace at 6.5%. The faster reading was the result of strong growth in commerce (+8.5% year-on-year) and in transport and telecommunications (+10.5% yoy). In addition, construction bounced back and grew 6.7% in August, which contrasted the 2.9% contraction registered in July. However, a month-on-month comparison saw economic activity remaining virtually flat, increasing by only a seasonally adjusted 0.06% over the previous month, well below the 1.52% expansion observed in July. Despite the monthly acceleration, the trend continues to point to a moderation in economic activity, with annual average growth in economic activity falling from 8.3% in July to 8.1% in August, thus marking the lowest rate since October 2010. In its September inflation report, the Central Bank states that it expects the economy to expand 6.3% this year. For 2012, the Bank expects economic growth to moderate to 5.7%.
Author: Ricardo Aceves, Senior Economist