Consumption in Peru
Peru - Consumption
GDP growth picks up notably in Q2
Economic growth accelerated considerably in the second quarter, coming in at 5.4% in annual terms. The reading marked the fastest pace of growth since Q4 2013 and was up from 3.1% in the first quarter. The second-quarter acceleration was primarily driven by stronger domestic demand.
Fixed investment expanded a stellar 8.6% in annual terms in Q2 on the back of rising private and public investment, picking up pace from Q1’s solid 5.4% increase. Private investment rose at the fastest clip in five years, propelled by improving terms of trade—particularly of mineral exports—and increasing business confidence. Public investment also gained steam, buoyed largely by a ramp up in spending on road infrastructure.
Similarly, private consumption expanded a robust 4.5% year-on-year, accelerating from the 3.2% increase recorded in Q1. Household spending was underpinned by healthy credit growth, rising employment and stronger consumer confidence. Meanwhile, government consumption grew a soft 1.1% year-on-year in Q2, moderating from Q1’s 3.2% rise.
On the external front, the sector’s contribution to growth improved from the previous quarter; nevertheless, it remained negative. Exports climbed 3.2% in year-on-year terms in Q2, broadly unchanged from Q1’s 3.1% rise. Reflecting still-healthy demand for capital goods, imports increased 6.3% in Q2, slightly below the 7.4% expansion logged in Q1. As a result, the external sector’s contribution to growth improved from minus 1.0 percentage point in Q1 to minus 0.6 percentage points in Q2.
Economic growth is expected to remain robust in the coming quarters, underpinned by solid domestic demand. The recent minimum wage hike, modest inflation and rising employment are seen supporting private consumption, while low borrowing costs and healthy credit growth should propel capital spending ahead. The main downside risk to the outlook stems from political instability, however.
Peru GDP Forecast
Panelists surveyed for this month’s LatinFocus report expect GDP to expand 3.8% in 2018, which is up 0.2 percentage points from last month’s projection. For 2019, the panel also sees the economy growing 3.8%.
Peru - Consumption Data
|Consumption (annual variation in %)||5.9||4.2||4.9||2.7||2.3|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||5.26||-0.60 %||Sep 20|
|Exchange Rate||3.30||-0.06 %||Sep 20|
|Stock Market||19,488||-0.23 %||Sep 20|
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September 18, 2018
At its 13 September monetary policy meeting, the Central Bank of Peru (BCRP) decided to keep the policy interest rate unchanged at an eight-year low of 2.75%, matching market expectations.
September 17, 2018
Economic activity expanded 2.3% year-on-year in July, above June’s 2.0% increase but still well below April’s annual growth rate of 7.8%, which was a five-year high.
September 11, 2018
The business confidence indicator edged down to 58.5 in August from July’s 59.0, remaining comfortablyabove the 50-point threshold that separates optimism from pessimism. Driving the small decrease in business sentiment was a deterioration in expectations on the near-future, while expectations on the medium-term improved.
September 6, 2018
Peru’s trade balance recorded a USD 489 million surplus in July, down considerably from June’s USD 1,284 million surplus but more than double the USD 230 million surplus recorded in July 2017. Growth in exports remained strong in July, coming in at 17.3% year-on-year following June’s hefty 20.7% increase.
September 3, 2018
Consumer prices in Metropolitan Lima increased 0.13% month-on-month in August, below July’s 0.38% rise.