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Pension Fund Withdrawals To Provide Further Tailwind To Growth

PERU
  • Following the-better-than-expected 5.0% y/y increase in economic activity in May, BBVA notes that half of the expansion was due to strong growth in the fishing sector, which surged by 329% y/y, contributing 2.5% points to growth. Non-primary GDP rose by 2.7% y/y, supported by acceleration in the construction sector, due to the push for public investment. It is noted that indicators for June point to a slowdown in growth, but BBVA still sees Q2 growth coming in at 4-4.5% y/y, with their full-year GDP forecast still at 2.9%.
  • Scotiabank also notes that cumulative growth in the year to May was an encouraging 2.9%. They believe that there are still some notable tailwinds going forward, foremost among these is the pension fund withdrawals, which should begin having an impact for a few months from July.
  • Meanwhile, Itaú says that at the margin, the monthly GDP increased by 0.1% m/m (sa), leading to a q/q growth rate of 1.7% in May (vs. 0.5% in Q1). Itaú recently changed their 2024 GDP growth forecast to 3.1%. Positive terms of trade and a weak La Niña phenomenon should support activity recovery throughout the rest of the year.
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