Peru | Activity grew 3.8% in 1Q22 but faces tougher challenges looking forward

Summary

Economic activity grew 3.8% YoY in March, following a 4.9% print in February. The non-primary component grew 5.4%, reflecting the removal of sanitary isolation measures. The primary component of GDP fell -2.2%; the sterner contractions of Fishing and Metallic Mining stand out.

Key points

• Key points:
• Activity grew 3.8% YoY in the first quarter, led mainly by the non-primary component thanks to the normalization of activity in the sectors that were still affected by sanitary restrictions. The expansion could have been bigger, but social conflicts continue to drag on primary activity.
• Activity is losing impulse relatively fast. The carryover for the rest of the year implies an expansion of 1.7% for 2022 GDP as a whole.
• Available indicators for April show that, in year-on-year terms, the situation is not too negative, but protests and social conflicts persist.
• In the labor market, positive trends remain in place. In March, formal jobs continue to increase while salaries expand in real terms. Advance figures for April show an improvement in employed EAP for Lima, but employment quality does not recover.
• In BBVA Research, we continue to expect growth this year to print around 2.0%.

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