Peru: Economic activity decelerates in May
Latest reading: Economic activity was up 1.8% on a year-on-year basis in May, following a 3.7% rise in the previous month. The reading came in well below market expectations due to weather anomalies that dragged down the primary sector—particularly fishing, which contracted significantly as a result of lower anchovy extraction volumes.
Relative to the previous month’s figures, readings in May worsened for commerce (+6.9% on a year-on-year basis vs +7.3% in April), construction (+4.7% vs +12.9% in April) and manufacturing (-10.7% vs +2.2% in April). In contrast, readings picked up for agriculture (+0.1% vs -1.6% in April) and mining and hydrocarbons (+2.6% vs -3.2% in April).
In month-on-month terms, economic activity declined 1.1% in May, following a 0.6% increase in the prior month.
Panelist insight: Regarding the outlook, Yalina Crispin and Hugo Vega, analysts at BBVA, noted:
“Looking ahead, demand indicators are expected to remain solid: business and consumer confidence have rebounded following the presidential election result, and the external context—beyond the persistence of the conflict in the Middle East—should be favorable, in an environment of good prices for export metals. The main drag would be El Niño, which would continue to affect the performance of some sectors.”