Published on Wednesday, May 15, 2024

Peru | GDP falls 0.3% in March, a negative surprise for the market

GDP contracted 0.3% YoY in March. This result was influenced by the fact that some activities were affected by two fewer days of productive activity given that Easter was scheduled on March 28 and 29 in 2024, while in 2023 it was celebrated on April 6 and 7. This effect will be reversed next month.

Key points

  • Key points:
  • The primary component contracted 0.8%, explained by the contraction of fishing, the result of a lower availability of species for freezing and canning, and non-primary manufacturing, which was affected by the lower catch of anchovy compared to last year. Furthermore, the mining and hydrocarbons sector registered a slowdown given a high year-on-year comparison base in March.
  • For its part, non-primary GDP contracted 0.1%. Non-primary manufacturing, construction and financial services fell during the month, reflecting, at least in part, the effect of Easter. This was partially offset by the better performance of the restaurant sector and other services.
  • Available indicators for April suggest that activity regained dynamism in that month, which will naturally be influenced by the reversal of the effect of Easter but also, for example, the beginning of the first anchovy catching season in the central-north zone.
  • We estimate that YoY GDP growth will be greater in the following quarters of the year. This forecast considers that (i) weather conditions have normalized, which from now on will mainly benefit agriculture and fishing; (ii) public investment will continue to show interesting growth rates given the improved execution of subnational governments in their second year of management; (iii) the environment will become increasingly conducive to spending by families and companies; (iv) there will be some positive impact from the greater availability of resources after enabling a new withdrawal of private pension funds; and (iv) business confidence has improved, reaching its highest levels in the last three years.

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