Peru | New decline in GDP reinforces downward bias in forecast for 2023

GDP contracted 0.6% YoY in August. By productive sectors, the non-primary component contracted 1.9%, due to the decline in the construction sector and non-primary manufacturing. For its part, the primary component of GDP registered a growth of 4.5% due to increased fishing and mining production.

Key points

• Key points:
• By productive sectors, the non-primary component of GDP contracted 1.9%, due to the decline in the construction sector because of lower private and public activity, and in non-primary manufacturing, particularly that linked to the production of consumer and intermediate goods.
• On the other hand, the primary component of the GDP registered a growth of 4.5%, thanks to the progress of the Fishing sector (and of Primary Manufacturing) due to the landings registered during the exploratory fishing that was carried out in August as part of the first season of anchovy capture in the north-central area, as well as the increased mining production.
• Available indicators signal, on balance, that activity in September remained weak. The growth of electricity output lost dynamism and the high-frequency indicators of private consumption and investment prepared by BBVA Research continue to decline. By contrast, public investment expanded modestly.
• The weakness that activity continues to show in the third quarter and sectoral trends reinforce the downward bias of our growth forecast for 2023, currently at 0.4%.
• The decline in inflation, the beginning of the monetary normalization cycle, and an expected acceleration of public spending aimed at mitigating the impacts of El Niño at the beginning of 2024 will provide some support to domestic demand for the remainder of the year. However, the outlook for climatological anomalies remains complicated. Furthermore, Quellaveco's positive statistical momentum (low year-on-year comparison base) will decrease from now on given that its production register began on September of last year. And to this is added that business confidence fails to recover.

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