Peru | GDP grows for the first time in seven months, although modestly

GDP grew 0.3% YoY in November. By productive sectors, the primary component grew 8.8%, where the growth of agriculture, fishing and metal mining stood out. On the other hand, the non-primary component of GDP remains in negative territory.

Key points

• Key points:
• The primary component of GDP grew 8.8% (October: 1.6%). In particular, the push provided by the metal mining sector (due to Quellaveco's contribution to the production of copper and molybdenum) and the fishing sector (the second capture season of anchovy in the central-northern zone began this year in October, while in 2022 it did so towards the end of November) stood out.
• The non-primary component, on the other hand, contracted 1.4% (October: -1.4%). Here, the construction (-8.1%, although the year-on-year contraction was smaller than the previous month) and non-primary manufacturing (-6.7%) sectors continue to show significant decline.
• With this result, GDP decreased 0.6% year-on-year so far this year. In comparison to the previous month (corrected for seasonality), the level that GDP reached in November is consistent, according to the INEI, with an improvement of 0.8% (0.1% growth in October).
• Considering a preliminary balance of these indicators for December and the figures already printed for GDP in October and November, the Peruvian economy would have contracted again in the fourth quarter of 2023, although to a lesser extent than in the third.
• The outlook is somewhat more positive for the first quarter of 2024. The climatological anomaly has decreased significantly in recent weeks and is now compatible with weak warm conditions. Furthermore, the year-on-year comparison base in the first quarter of the year is relatively low. Added to all this is that the environment for private sector spending is improving at the margin (inflation has decreased, the Central Bank is lowering its reference interest rate, and confidence, although still in a zone of pessimism, improves). In this context, our growth forecast for the first quarter of the year has an upward bias.

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