Peru | After a difficult first quarter, GDP starts very weak in the second

GDP grew 0.3% a/a in April. The primary GDP grew 5.0% supported by the Metal Mining production, the negative was the marked decline in the agricultural sector. Non-primary GDP, for its part, remained in negative territory in a context in which private spending indicators continue to suggest weakness.

Key points

• Key points:
• In April, the performance of Metallic Mining stood out, reaching its highest record so far this year (17.4%), supported by the contribution of the Quellaveco copper mine. The negative within the set of primary activities was the marked decline in the Agricultural sector, which occurred in an environment of adverse weather conditions that have been dragging on for several months.
• For its part, the non-primary component of GDP continues to fall and in April it did so by 0.5% in a context in which private spending indicators continue to suggest weakness and in which the northern zone of the country was affected by floods.
• Available indicators suggest, on balance, that activity will remain weak for the remainder of the second quarter.
• The outlook for the second half of the year will continue to be challenging. On the external side, interest rates will remain high and world growth will moderate. On the local side, although the political and social upheaval has diminished and confidence is improving, El Niño Costero has had a negative impact on activity and its effects will be felt even until 2024. On the positive side, its impact will be mitigated by the work of prevention that the Government begins to execute.
• In this context of a difficult first quarter, of the weakness with which the GDP begins the second, and of the deterioration of the forecasts for El Niño (more intense and prolonged), our projection of growth of 1.9% for 2023 has a downward bias and we will review it in the coming days.

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