Peru |Positive surprise in December GDP: first YoY expansion since February

Summary

GDP grew 0,5% year-on-year in December and positively surprised the market. Incorporating the December result, we estimate GDP fell 11,1% in 2020

Key points

• Key points:
• Economic activity in December 2020 printed a positive growth rate, something that had not happened since February, surprising the market. Some of the sectors that showed a better result compared to our estimates are: Financial Services and Insurance and Construction. With this result, we estimate GDP fell 11,1% in 2020.
• At the beginning of the year, we estimate economic activity weakened somewhat. In January we observed a decline in electricity production and a sharp drop in public investment.
• In February, with the tightening of isolation measures, the weakening of activity will be more clear. However, it is also important to point out that the isolation measures implemented this time are less restrictive than those imposed in the second quarter of 2020 and fewer productive sectors have been affected.
• It bears mentioning that employment continues to normalize with total jobs increasing in Lima and a fall in the fraction of inadequate jobs (those with not enough hours or low wages). However, the number of adequate jobs lost in the aftermath of the crisis remains significant.

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