Peru | GDP growth continues to be weighed down by extractive activities

Economic activity grew 2.3% year-on-year in May. On the positive side, the non-primary component of GDP stood out again. On the primary side, however, a decline will be lost, even more pronounced than in previous months.

Key points

• Key points:
• GDP grew 3.5% year-on-year in the first five months of the year. As in May, during the first five months of 2022 the non-primary component was the one with the greatest dynamism, supported by the normalization of the activities that were most affected by the sanitary isolation measures and by higher spending by families. On the contrary, the primary component, and in particular mining and fishing, weighed down activity.
• According to the INEI, with an expansion of 1.4% month-on-month (seasonally adjusted). It is a better result than those recorded in previous months. However, despite this improvement in the margin, the level of GDP (adjusted for seasonality) is still below that reached at the beginning of 2022.
• The indicators available for June indicate, on balance, that in year-on-year terms growth will be somewhat higher in that month. The internal consumption of cement, a good indicator of the behavior of the Construction sector, registered a better performance in June and something similar happened with the production of electricity and public investment. In addition, one of the social conflicts with the greatest impact on mining was temporarily resolved in the second half of that month.
• In the second half of the year, GDP growth will tend to moderate. We estimate that in the second half of the year activity will grow between 1.0% and 1.5% (closer to 3.5% in the first half).

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