INEI: national economy fell 0.43% in the first quarter of 2023

After the Peruvian economy registered falls of 1.02% and 0.51% respectively in January and February, it was able to grow in March of this year, but only 0.22%. Despite this, the Gross National Product (GDP) closed the first quarter of 2023 with a decrease of 0.43%, according to the National Institute of Statistics and Informatics (INEI).

This negative result is below the 0% estimated by the Central Reserve Bank of Peru (BCRP), in addition, there was no quarterly GDP contraction since the most critical time of the pandemic (2020), indicates BBVA Research.

“(This result) is marked by an environment of political and social upheaval and a subsequent deterioration in weather conditions (cyclone Yaku, warming of the sea)”, summarizes the bank.

swooping construction

The poor performance in the first three months of the year is mainly explained by the strong drop in the construction sector, which decreased by 11.48%. Thus, this result had a negative incidence of -0.72 percentage points in the dynamism of the first quarter.

Guido Valdivia, executive director of the Peruvian Chamber of Construction (Capeco), points out that this decline in the sector does not surprise them, since double-digit falls had also been observed in the first two months of the year due to fewer private works.

“What has been happening for several months now is a restriction on private construction, and this made sense because also in January and February the fall was double-digit, despite the fact that public works had grown,” explained the union spokesperson.

Likewise, he notes that social protests and heavy rains have slowed down the works because the products do not arrive properly and it is not possible to build due to climate change. Therefore, there is uncertainty in the sector due to the high probabilities of an El Niño phenomenon.

However, it indicates that the construction It could advance if the Government redoubles its efforts with its social housing policies, which is also being affected.

Sectoral advance

The telecommunications and other information services sector was another to which it did not do well in the first quarter and posted a 9.37% drop.

Meanwhile, the agricultural sector decreased by 0.17%, being its worst result at the beginning of the year in almost a decade. The livestock subsector fell 0.87%, while agricultural activity grew 0.32%.

On the other hand, among the items with positive results The mining and hydrocarbons sector stands out with an accumulated advance of 2.5%, being his best start since 2017.

The increasing volumes in the production of copper of 10.34% and iron of 32.26% had a contribution of 5.84 percentage points in the global performance in the metallic mining activity. While the hydrocarbons subsector contracted by 1.06% in the first three months of the year due to the low levels in the exploitation of natural gas liquids (-4.34%) and crude oil (-6.15%).

2.5% is unlikely

With a negative result in the first quarter, reaching the 2.5% growth projected by the government would be very unlikely, says Juan Carlos Odar, director of Phase Consultores.

According to the economist, to achieve the goal set by the Executive, a monthly growth of 3.4% should be achieved in the rest of the year, which is very complicated. Along these lines, Phase Consultores forecasts that the national GDP will close 2023 with an advance of just 1.9% and with a downward bias.

This same forecast is shared by BBVA Research and mentions that the rest of the year will be challenging, both externally and internally, considering that a possible El Niño phenomenon would have some impacts on the activity, which would be mitigated by prevention efforts.

For its part, the Government announced that they will present the second part of Con Punche Peru.

Meager GDP will not reduce poverty

The lower economic growth this year – taking into account that the first quarter closed negatively – will be reflected in those who have less, since in 2023 there would not be a reduction in the monetary poverty rate that today reaches more than 9 million Peruvians.

“It is likely that the Poverty rate may continue to rise throughout this year to the extent that we have low growth, inflation above the Central Bank’s goal, and the fact that the new poverty is fundamentally urban, and that it is concentrated in Lima,” affirms the economist Juan Carlos Odar.

It is important to mention that, according to the world Bank85% of the reduction in monetary poverty is attributed to economic growth.

reactions

Juan Carlos Odar, director of Phase Consultants

“The rate of growth for the year will be less than the 2.5% forecast by the Government and more in line with what we had projected, which was 1.9% and probably with a downward bias”.

Guido Valdivia, CEO of Capeco

“Almost no activity in the private construction sector has been developed in the last seven months and the only one that had performed well, such as social housing, has started very low.”