GDP fell 0.87% in the first two months of this year

The economy is still in the negative section. After the 1.2% drop seen in January —after almost two uninterrupted years in the green—, in February, production fell 0.63%, according to the National Institute of Statistics and Informatics (INEI). Thus, during the first two months of this year, the GDP contracted 0.87%.

contracted sectors

The low results for the second month of the year are due to the negative development of the agricultural sector (-1.08%), manufacturing (-1.27%), construction (-10.15%), telecommunications (-9.15 %) and financial (-7.95%).

Along these lines, the agricultural subsector (-0.99%) was one of the most affected by the severe weather conditions registered in recent weeks by Cyclone Yaku. In addition, the prevalence of lower night temperatures that caused delays in the growth of the fruits.

Thus, lower volumes of paprika (-74.5%), corn corn (-25.0%), tomato (-23.7%), onion (-22.2%), potato (- 20.0%), alfalfa (-9.2%) and plantain (-7.5%).

For their part, the items that advanced the most were fishing (8.96%); mining and hydrocarbons (0.27%); trade (2.37%); transport, storage and messaging (2.30%); lodging and restaurants (4.07%); among others.

MEF will have to be less optimistic

The Ministry of Economy and Finance (MEF) estimates that the GDP will close this year at 3.1% due to factors such as the reactivation of China, the restraint in the rate hike by the United States Federal Reserve and the stable prices of the commodities. While the Central Reserve Bank of Peru (BCRP) forecasts a rate of 2.6%.

However, the recent negative figures envision a different picture.

for the economist Juan Carlos Odarthe MEF will probably make a downward revision in its next macroeconomic report, because to reach the proposed estimate, it should be growing 3.8% from March to December.

“The more months that pass with an annual growth rate below 3.1%, the more unlikely it is to reach the official MEF figure. It is unlikely that there are conditions to think that the rest of the year will have high rates, ”said the specialist for La República.

What would prevent it? Odar asked to consider weather anomalies and distrust for private investment in the new GDP calculation.

projections

The MEF maintains a favorable outlook despite the recent drop and believes that positive growth will resume from March due to the recovery process in economic activity: for example, greater demand in sectors related to electricity consumption and production, as well as for the advances of Con Punche Peru.

The BCRP expects a first quarter with zero growth, while Odar estimated 1% for the third month.

reactions

Juan Carlos Odar, Economist

“The official projection that the MEF has, which is 3.1%, will most likely be revised downward in the next update report. That number is too high for what is expected.”.