Peru: Economy gains momentum in second quarter
August 23, 2013
Peru's GDP expanded 5.6% in the second quarter over the same period last year. The reading represents an acceleration compared to the 4.5% increase observed in the first quarter - the slowest pace in more than three years - and was in line with market expectations. On a quarterly basis, GDP expanded a seasonally adjusted 1.1% in Q2, which came in slightly below the 1.4% increase tallied in Q1.
The faster increase in the second quarter was seen across the board. Growth in private consumption and government spending improved in Q2 over the same period last year, increasing 5.3% and 8.5% respectively (Q1: +5.2% year-on-year; Q1: +6.1% yoy, respectively). In addition, gross fixed investment accelerated from a 9.3% increase in Q1 to a 12.1% expansion in Q2.
Moreover, the external sector improved in the second quarter, as exports of goods and services swung from a 9.4% contraction in Q1 to a 3.7% increase in Q2. Meanwhile, imports expanded 8.2% in the second quarter, slightly slower than the 8.7% rise registered in the first. The external sector's net contribution to overall economic growth improved from minus 3.8 percentage points in Q1 to minus 1.1 percentage points in Q2.
The government forecasts economic growth of around 6% this year. In its June inflation report, the Central Bank projected that the economy will grow 6.1%. For 2014, the Bank sees the economy expanding 6.3%.
LatinFocus Consensus Forecast panellists expect GDP to expand 5.7% this year, which is down 0.1 percentage points from last month's projection. For 2014, the panel expects the economy to increase 5.8%.
Author: Ricardo Aceves, Senior Economist