Peru | After two months of decline, GDP grew in March, albeit very weakly

Summary

GDP grew 0.2% YoY in March. Primary GDP grew 8.5%, particulary the mining sector, supported by Metal Mining production. The non-primary component of GDP, however, remained negative in March. This occurred in a context of adverse weather conditions.

Key points

• Key points:
• In March, the performance of Metal Mining stood out, reaching its highest record so far this year (8.7%), supported by the contribution of the Quellaveco copper mine, the gradual normalization of mining operations affected by the political and social upheaval at the beginning of the year, and on a low year-on-year basis of comparison.
• The non-primary component of GDP, for its part, remained negative in March. This occurred in a context of adverse weather conditions, which led to landslides and mudslides, floods, and interruptions to transportation routes. Thus, Construction and Non-primary Manufacturing registered strong setbacks in the month.
• In seasonally adjusted terms, the level reached by the GDP in March is consistent, according to the INEI, with an expansion of 0.02% with respect to the previous month.
• With the March result, GDP fell 0.4% year-on-year in the first quarter, marked by an environment of political and social upheaval and subsequent deterioration in weather conditions.
• The outlook for the remainder of 2023 will continue to be challenging. On the external side, interest rates will remain high and world growth will moderate. On the local side, inflation will continue at high levels for some time to come, the El Niño Phenomenon (FEN) that is unfolding will probably have some impact on activity (mitigated by prevention efforts), and the risk of new outbreaks of protests. This scenario continues to be consistent with an expansion of activity in 2023 of around 1.9%.

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