Peru | GDP falls in December and thus contracts 0.6% in 2023

GDP fell 0.7% y/y in December and 0.6% for the year as a whole. It was a year of negative shocks (political and social upheaval, weather anomalies) and in which the environment for private sector spending was challenging (high inflation and interest rates).

Key points

• Key points:
• By productive sectors, the primary component of GDP contracted 4.7% in December, while the non-primary component grew 0.5%, its first positive rate of the year. The sharp contraction in fishing stood out, explained by lower anchovy landings, which in turn had a negative impact on the industry that processes these resources. On the positive side, metal mining registered an expansion of 4.1%, which together with the better performance of commerce and some branches of the services sector moderated the contraction of activity in December.
• In the quarterly analysis, GDP contracted 0.4% year-on-year in the last quarter of the year (-1.0% in the third quarter). According to our own preliminary calculations, this figure is consistent with an expansion of 0.6% compared to the previous quarter and in that sense the GDP would have experienced its greatest advance in the year in the fourth quarter of 2023.
• In annual terms, GDP contracted 0.6% in 2023. It was a year of negative shocks (political and social upheaval, weather anomalies) and in which the environment for private spending was challenging (high inflation and high interest rates). In this context, confidence failed to recover.
• The outlook is somewhat more favorable for the beginning of 2024. Available spending indicators point in that direction. Added to a relatively low year-on-year comparison base is the fact that inflation has decreased, interest rates are falling, while the weather anomaly is tending to subside and forecasts anticipate a more neutral situation going forward. This environment is more conducive to a recovery, timid for now, of confidence. We preliminarily estimate that GDP will grow between 2.5% and 3.0% year-on-year in the first quarter.

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