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PERU: Scotiabank Say New Data Suggests Weak GDP Number for June

PERU
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  • According to Scotiabank, early sector information for June GDP in Peru just keeps getting worse. Agriculture GDP figures for June showed a 3.1% y/y decline, throwing Scotia’s forecast of 2.0% y/y growth for June off track. They now expect something closer to 1.0%, and while still positive, is quite a distance from the +5.0% growth of April–May. 
  • The decline in growth involved both products for domestic demand and agro-industrial goods adds to other weak early indicators. As Scotiabank indicated last week: mining GDP fell 8.1% y/y, in June; cement demand was down 5%, and while fishing (+57%) and public investment (+9%) were both positive, they were much lower than previous months.
  • Scotiabank note there is not much hope that domestic demand sectors will pick up the slack, considering that electricity growth was very weak, 0.6% y/y, in June. July may be better, however, if only because pension fund withdrawals began in late June, and should help bolster consumption to some extent starting in July. Therefore, Scotia maintain their full year GDP growth forecast of 3.0%.
  • As a reminder, economic activity data for June is scheduled for release this Thursday and is expected at 1.7% Y/y.
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  • According to Scotiabank, early sector information for June GDP in Peru just keeps getting worse. Agriculture GDP figures for June showed a 3.1% y/y decline, throwing Scotia’s forecast of 2.0% y/y growth for June off track. They now expect something closer to 1.0%, and while still positive, is quite a distance from the +5.0% growth of April–May. 
  • The decline in growth involved both products for domestic demand and agro-industrial goods adds to other weak early indicators. As Scotiabank indicated last week: mining GDP fell 8.1% y/y, in June; cement demand was down 5%, and while fishing (+57%) and public investment (+9%) were both positive, they were much lower than previous months.
  • Scotiabank note there is not much hope that domestic demand sectors will pick up the slack, considering that electricity growth was very weak, 0.6% y/y, in June. July may be better, however, if only because pension fund withdrawals began in late June, and should help bolster consumption to some extent starting in July. Therefore, Scotia maintain their full year GDP growth forecast of 3.0%.
  • As a reminder, economic activity data for June is scheduled for release this Thursday and is expected at 1.7% Y/y.