Investment in Peru

Peru Investment | Economic News & Forecasts

Peru - Investment

GDP growth strengthens notably in Q1

Economic growth strengthened in the first quarter, coming in at 3.2% in annual terms. The reading marked the fastest pace of growth since Q3 2016 and was up from 2.2% in the last quarter of 2017. A stronger expansion in fixed investment and a less negative contribution from the external sector drove the acceleration.

Fixed investment expanded 5.1% in annual terms in Q1 on the back of rising public and private investment, following Q4’s weaker 2.8% increase. Public investment increased robustly, as public spending on reconstruction and maintenance was ramped up. Meanwhile, private fixed investment also increased, stimulated by improving terms of trade, specifically higher prices for minerals.

On the other hand, government consumption expanded 5.2% year-on-year, decelerating from the 8.3% increase recorded in Q4, mainly due subdued growth in spending by regional administrations. Private consumption in Q1 grew 3.2%, above Q4’s 2.6% rise. Household spending was underpinned by healthy credit expansion, rising wages, sustained consumer confidence and notably low inflation, although rising unemployment again limited the scope of the increase.

Thanks to higher commodity prices, the external sector’s contribution to growth improved, although it remained negative. Exports swung from a 0.7% contraction in Q4 to a 4.0% expansion in Q1, while imports increased 7.0% in Q1, broadly unchanged from Q4’s 7.1% increase. As a result, the external sector’s contribution to growth improved from minus 1.9 percentage points in Q4 to minus 0.7 percentage points in Q1. The healthy expansion in imports was driven by robust demand for capital goods.

The economy is expected to gain steam in the coming quarters, especially if the new government is able to scale up public investment to rebuild infrastructure damaged by the Coastal El Niño and improve the business climate. This should also boost consumer sentiment, underpinning household spending. Political instability remains the main downside risk to the outlook, however.


Peru GDP Forecast


Panelists surveyed for this month’s LatinFocus report expect GDP to expand 3.6% in 2018, which is unchanged from last month’s projection. For 2019, the panel sees the economy increasing 3.7%.

Peru - Investment Data

2013  2014  2015  2016  2017  
Investment (annual variation in %)7.9  -2.0  -5.2  -4.7  -0.3  

Sample Report

5 years of economic forecasts for more than 30 economic indicators.

Download

Peru Facts

ValueChangeDate
Bond Yield5.09-0.60 %Aug 07
Exchange Rate3.27-0.06 %Aug 07
Stock Market20,223-0.23 %Aug 07

Sample Report

Get a sample report showing all the data and analysis covered in our Regional, Country and Commodities reports.

Download

Start Your Free Trial

Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.

Sign Up

Economic News

Search form