According to consultancy Focus Economics, Peru’s GDP growth is expected to reach 2.2% this year, compared to 2.68% last year, despite expected recovery in key sectors such as mining.
While 2022 GDP was in line with market expectations, it was also lower than the central bank’s March growth forecast of 3.2%, with activity slowing in the second half of the year. Statistics office Inei reported growth of 0.9% in December.
The Ministry of Economy and Finance It is estimated that the massive protests against President Dina Boluarte in December caused losses of 1 billion soles (US$260 million). December production fell 0.24% mom, according to Inei.
January and February numbers will be even lower as protests ramped up across the country. However, Economy Secretary Alex Contreras recently told a TV channel that the worst moment of the protests was over and the recovery would start in March.
PAY
Although the mining sector rebounded in December, growing 11.1% from November, it posted an annualized decline of 0.24%. The decline was driven by a drop in zinc, silver, molybdenum, lead and gold production, which fell 10.7%, 7.6%, 7.5%, 3.4% and 0.8% respectively. Meanwhile, iron, tin and copper production grew by 6.5%, 4.6% and 4.1%, respectively.
The protests, including mine invasions and roadblocks, have hit the sector hard and the situation would be even worse if Anglo American’s Quellaveco copper mine had not come on stream in the second half. Excluding the asset, copper production would have increased 0.8% to 2.3 Mt, the company said Department of Energy and Mines.
Trade accounts for 10% of GDP. The article grew 3.26% for the full year and 1.80% in December.
Manufacturing fell 4.65% yoy in December on the poor performance of the non-primary sub-sector but grew 0.96% for the full year.
Construction registered 2.97% growth for the year, driven by advances in public works but not private projects. Cement consumption contracted by 0.68% due to the slower pace in the real estate and industrial sectors.
2023
Growth is expected to be modest this year, but higher compared to Peru’s regional peers. Credicorp Capital plans 2% for Peru and 1.3% for Colombia, 1.2% for Mexico and 0.9% for Brazil.
Inflation will remain the most important obstacle to growth this year. “Private consumption is beginning to show the effects of a prolonged period of high inflation,” Víctor Fuentes, chief economist at economic think tank IPE, told BNamericas. IPE forecasts GDP growth of 2.1%, with a downward trend.
According to Focus Economics, Peru is one of the few countries where the outlook for private investment is negative. Credicorp and Scotiabank estimate private investment will fall by 2% and 2.5% respectively this year.
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