The Peruvian economy continues to rebound, with a growth rate of 4% in April and May, signaling a recovery from last year's recession. This growth is supported by increased public and private spending, as the government aims to sustain the positive momentum by investing in the mining sector. Peru fell into a recession last year due to the El Niño weather phenomenon, lower private investment, and lingering effects from earlier social conflicts. To boost the critical mining sector, the government has allocated millions of dollars [46a5278a] [42e762c9].
In February 2024, the Peruvian economy grew by 2.85%, exceeding analysts' forecast of 2.10% and marking the country's second straight month of economic growth. The mining and hydrocarbons sector saw the biggest expansion, growing close to 16%, with metals mining increasing by just over 17%. On the other hand, the manufacturing sector was down 10.92%, while the fishing sector shrank 31.26%. The agricultural sector also shrunk nearly 2%. Peru is an important global producer of copper, silver, and zinc [42e762c9].
Peru's largest bank, Banco de Crédito del Perú (BCP), has raised its annual GDP projection from 2.5% to 3% and increased its expectation for growth in private investment from 2.1% to 4.5%. The bank attributes the rebound to factors such as the absence of external shocks, a favorable copper price, lower inflation, and countercyclical policies of the central bank. BCP expects a GDP growth of 2.5% in the first quarter of 2024. The El Niño phenomenon is no longer considered a risk factor for growth. BCP also expects mining investment to grow 5% in 2024, with the Toromocho expansion and Hochschild Inmaculada optimization projects leading the way. Private consumption is expected to grow 3% supported by a reduction in inflation and improvement in economic activity. BCP does not rule out growth above 3% this year. The central bank is expected to continue reducing the benchmark rate, attracting foreign capital. BCP's report highlights positive preliminary indicators such as a 4.5% growth in electricity demand, 7% growth in capital imports, and 2% growth in real estate sales in February compared to the same month in 2023. Economic expectations have improved significantly in recent months. BCP's report states that the factors that could lead to a bigger GDP rebound are greater execution of public investment, positive marginal effects from a potential La Niña, a favorable environment in financial markets, growth in specific sectors like inbound tourism, and authorities unblocking projects [8d256995].
Peru's economy grew 4% in April and is projected to grow at a similar rate in May, according to Economy Minister Jose Arista. The country's government has implemented measures to boost the critical mining sector and expects private consumption and internal demand to rise in June and July. Peru fell into recession last year but returned to growth in the first quarter of this year. The government aims to make the recovery sustainable and projects a growth rate of 3.1% for the year. Peru's annual inflation is within the central bank's target range, registering 2% in May. The central bank held the benchmark interest rate at 5.75% on Thursday, citing persistent services inflation [6ddeccb6] [42e762c9].