Peru | New GDP contraction in October, the sixth in a row

Summary

GDP contracted 0.8% YoY in October. By productive sectors, the non-primary component of GDP contracted 1.7%, highlighting the decline in the construction and non-primary manufacturing sectors. On the other hand, the primary component of GDP registered 1.5% growth due to increased fishing and mining production.

Key points

• Key points:
• By productive sectors, the non-primary component of GDP contracted 1.7%, highlighting the decline in the construction and non-primary manufacturing sectors, particularly in the branches oriented to the production of consumer and intermediate goods.
• On the other hand, the primary component of GDP registered 1.5% growth, with significant advance in the fishing and primary manufacturing sectors, in both cases due to higher anchovy landings. It should be noted that the mining sector continues to register an interesting year-on-year expansion, although it is decreasing as the base effect runs out, while the agricultural sector fell.
• Available indicators point, on balance, to activity remaining weak in the fourth quarter in general, although perhaps less markedly than in the previous one.
• At the beginning of next year, the development of El Niño, its intensity, and its impact on precipitation will be important. In the latest report published by the ENFEN Multisectoral Commission on this phenomenon, on November 24, an event of between moderate and strong magnitude was anticipated as the most likely for the summer of 2024, with above-normal rainfall on the northern and central coast of the country, without ruling out very heavy rainfall. However, more recent data show that the sea surface temperature anomaly has decreased significantly. In this scenario and taking into account the low year-on-year comparison base, the decrease in inflation, and the gradual decrease that interest rates are beginning to have, activity should perform better in year-on-year terms at the beginning of 2024.

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