Peru | GDP recovers in April and grows 5.3%: a positive surprise

GDP expanded 5.3% YoY in April. This result was influenced by the fact that some activities were affected by two more days of productive activity given that Easter was celebrated in April last year, while this year it was scheduled in March.

Key points

• Key points:
• The primary component expanded 10.5%, explained by the advance of the agricultural sector, due to the larger areas of cultivated and harvested surface as well as more favorable rainfall; and fishing, where the first season of anchovy capture in the central-northern area also boosted primary manufacturing (last year the first extraction season was canceled, so the comparison base was practically nil).
• For its part, non-primary GDP grew 3.5%: construction, transportation and other services showed significant progress in the month, which would reflect, at least in part, the effect of Easter.
• Available indicators for May suggest that activity will continue to show significant growth in that month, influenced by the impact of the first anchovy fishing season in the central-northern area (more than 60% of the quota was caught in May, benefiting fishing and also primary manufacturing).
• We estimate that, after the timid growth of 1.4% YoY in the first quarter of the year, the growth in GDP will be greater in the following quarters of the year. This forecast considers that (i) weather conditions have normalized, which will mainly benefit agriculture (but also fishing); (ii) public investment will continue to show interesting growth rates due to improved execution of subnational governments in their second year of management, as is usually observed; (iii) the environment for spending by households and firms is more favorable (inflation around the center of the target range and declining interest rates); (iv) there will be a positive impact from the greater availability of resources from withdrawals from private pension funds; and (iv) business confidence has tended to improve, reaching its highest levels in the last three years.

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