Peru | GDP grew 3.7% year-on-year in April, but signs of slowdown get stronger

After growing 3.8% year-on-year in March, economic activity advanced 3.7% in April, despite the strict confinement that took place in the city of Lima. The expansion of the non-primary component stood out (5.1%). On the other hand, the primary component of GDP, more linked to extractive activities, contracted by 1.3%.

Key points

• Key points:
• After growing 3.8% year-on-year in March, economic activity advanced 3.7% in April, despite the strict confinement that took place in the city of Lima. The expansion of the non-primary component stood out. On the other hand, the primary component of GDP, more linked to extractive activities, contracted, affected mainly by social conflicts in the areas of influence of mining operations and by unfavorable weather conditions.
• Activity is losing momentum relatively quickly. The carryover for the rest of the year implies an expansion of 1.0% for GDP in 2022 as a whole.
• The indicators available for May point, on balance, to growth in year-on-year terms being lower than in April.
• As for the labor market, the figures show an improvement, but this is still insufficient for the situation in the labor market to completely normalize and recover the levels seen before the health crisis.
• Going forward, the environment will be more challenging: it is true that families will have greater liquidity due to the release of funds, but the external context is deteriorating more and more, social conflicts persist, inflation will remain high for a while longer, financing will become more expensive, the noise from the political sphere will hardly recede, and the positive effect of the relaxation of the isolation measures will be diluted over the coming months.

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