Peru: Economic activity picks up in July
September 15, 2011
In July, economic activity expanded 6.5% over the same month last year. The reading represented an acceleration compared to the 5.3% expansion tallied in June, which had marked the slowest pace since February 2010. The monthly expansion overshot market expectations that had economic activity growing 5.8%. The faster reading was mainly the result of strong growth in commerce (+8.5% year-on-year) and in energy and water supply (+7.4% yoy). In addition, fishing swung from a 15.8% contraction in June to a 75.8% expansion in July, partly due to good weather and sea conditions. On a monthly basis, economic activity expanded a seasonally adjusted 1.52% over the previous month, which was well above the 0.69% increase observed in June. Despite the monthly acceleration, the trend continues to point to a moderation in economic activity, with annual average growth dropping from 8.5% in June to 8.3% in July, thus marking the slowest growth rate since October 2010. In its September inflation report, the Central Bank revised its growth forecasts and now expects the economy to expand 6.3% this year, below its previous 6.5% estimate. For 2012, the Bank expects economic growth to moderate to 5.7%, below the 6.5% increase previously reported.
Author: Ricardo Aceves, Senior Economist