Peru | New year-on-year contraction of GDP in June and in the second quarter

Summary

GDP contracted 0.6% YoY in June. By productive sectors, the non-primary component of GDP contracted 0.8% in a context in which private spending indicators continue to suggest weakness. However, the primary component of GDP recorded moderate growth of 0.6%.

Key points

• Key points:
• The non-primary component of GDP contracted 0.8% YoY in June. In particular, Construction and Non-primary Manufacturing and some Services registered significant contractions.
• For its part, the primary component of GDP recorded moderate growth of 0.6% YoY. Within the set of these activities, the production of metal mining stands out (due to the push from copper extraction) and, negatively, the decline in the Fishing and Primary Manufacturing sector due to the suspension of the first anchovy fishing season in the north-central zone.
• In seasonally adjusted terms, the level reached by the GDP in June is consistent, according to the INEI, with a growth of 1.3% compared to the previous month and with the result of June, the GDP for the second quarter according to our estimates would have contracted 0.5% year-on-year.
• Available indicators point, on balance, to activity starting the third quarter weakly.
• We estimate that the recovery in the second half will be less pronounced than what we anticipated in our June forecast. The figures for the second quarter have been lower than projected (impliying a deviation in the same direction of three tenths of a percentage point for our 2023 forecast). In addition, the outlook for weather anomalies continues to deteriorate. And finally, productive sectors whose performance is more trending (non-primary GDP) and linked to private spending have been registering greater weakness than anticipated. This context reinforces the downward bias that the growth forecast for 2023 already had (currently at 1.6%), which we will review in the coming weeks.

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