INEI: GDP contracted 0.45% in the first half of 2023

Two consecutive quarters in red confirm the technical recession of the peruvian economy. The GDP in June fell 0.56%, thus the result for the first half of the year was -0.45%, according to the latest report from the National Institute of Statistics and Informatics (INEI).

From January to June, the sectors that had negative performance were fishing (-31.65%), construction (-8.97%), telecommunications (-8.09%), financial (-7.71%), manufacturing (-6.09%) and agriculture (-3, 37%). While eight items closed positively, of which mining (9.78%), accommodation and restaurants (5.28%) stand out; electricity, gas and water (5.23%); and other services (4.08%).

The Ministry of Economy and Finance (MEF) alleges that the result still reflects three shocks that began in December 2022: social conflicts, Cyclone Yaku and the El Niño phenomenon.

Regarding fishing, which is the sector that has fallen the most due to the absence of a first anchovy extraction season, and which has an impact on manufacturing, the head of this portfolio, Alex Contreras, hinted that there would be a second fishing season, despite the fact that this decision is made based on scientific research carried out weeks prior to said period, which usually begins in November of each year.

“The effects of this fall are going to moderatethe prospects for the second fishing season are better according to the latest information available, and we hope this will continue,” he said.

the lost year

For the MEF, the drop in the first half of the year will be offset by the performance of the second half of the year, aiming at an estimated growth of 1.5%. Reaching this goal required growing 2%; according to the economist armando mendozaits viable?

According to the specialist, the factors that could boost production do not have fertile ground to do so. For example, consumption has been badly hit because income has not recovered and inflation has reduced purchasing power.

On the private investment side, the political instability and shrinking markets repel incentives. “Entrepreneurs are not going to invest simply because the Government or the minister says so. Many of these sectors have idle installed capacity, so why are they going to start expanding their activities or building”, says Mendoza.

Regarding public investment, it is expected that through Con Punche Peru the objective can be achieved, but entering the final phase of the year, only a third of what is available has been invested, says the economist. Added to the impact of El Niño, the goal becomes distant.

For his part, the economist David Tuesta suggests that with these results, 2023 is a lost year. “Annualized growth in lean levels, very weak domestic demand and El Niño in sight. Weak trust and unpredictable political situation. Really, I am more concerned about 2024,” she highlighted.

reactions

Alex Contreras, Minister of Economy and Finance

“As more public investment is executed and private investment recovers, we will continue to recover. The first semester goes away more than to compensate in the second semester”.

Armando Mendoza, Economist

“Beyond whether 1.5% is reached, what is going to be verified this year is a trend that is already 10 years old, that Peru lost its supposed shine of being the economic star of the Latin America”.

Fishing is the sector that fell the most from January to June