Peru: Economic activity growth slows sharply in June
Economic activity increased 0.2% year on year in June (May: +5.1% yoy). Looking at the details of the release, the agricultural, mining and construction sectors swung to contraction and manufacturing growth slowed to a near halt, though the commerce sector expanded at a quicker pace in June.
The latest data puts the expansion over Q2 as a whole at 3.6%, more than double Q1’s rate.
On the reading and outlook, Goldman Sachs’ Santiago Tellez said:
“The steady recovery of activity between 4Q23-2Q24 was largely driven by two factors. First, a significant rebound in agriculture and fishing activities following weather-related disruptions. Second, accelerated capital spending by incoming local governments who overcame previous budget implementation challenges. We expect the activity momentum to slow over the next readings as these transitory tailwinds lose steam. Beyond that, we expect positive but below-trend growth in the remainder of the year driven by still tight external and domestic financial conditions, subdued business sentiment, low levels of mining investment, and weak governability conditions.”