Peru: Economy cools down in Q3
November 22, 2013
GDP expanded 4.4% over the same period last year in Q3, which was down from the 5.6% increase observed in Q2. The reading marked the lowest level since Q4 2009, but was slightly above the 4.3% expansion the market had expected. On a quarterly basis, GDP expanded a seasonally-adjusted 1.1% in Q3, which followed the 1.1% increase tallied in Q2.
Domestic demand was the main driver of the deceleration. Growth in private consumption and government spending expanded in Q3 over the same period last year, although at a slower pace with respect to Q2. Private consumption increased 5.1% (Q2: +5.3% year-on-year) and government spending expanded 7.5% (Q2: +8.5% yoy). Growth in fixed investment also experienced a deceleration, expanding 4.6% over the same quarter last year, which was well below the 9.4% expansion tallied in Q2.
The external sector improved in the third quarter. Exports of goods and services rose 3.6% over the same quarter last year in Q3 (Q2: +5.0% yoy). Meanwhile, imports expanded 3.8% in Q3, which was down from the 7.9% rise registered in the Q2. The external sector's net contribution to overall economic growth improved from minus 0.9 percentage points in Q2 to minus 0.3 percentage points in Q3, marking the highest contribution since Q1 2012.
The government forecasts economic growth of around 6.0% this year. In its September inflation report, the Central Bank projected that the economy will grow 5.5%. For 2014 and 2015, the Bank sees the economy expanding 6.2% and 6.7%, respectively.
LatinFocus Consensus Forecast panelists expect GDP to expand 5.3% this year, which is down 0.2 percentage points from last month's projection. For 2014, the panel expects the economy to increase 5.7%, which is unchanged from last month's estimate.