Peruvian economy grew 0% in the last 12 months

For the fifth consecutive month, the national gross domestic product (GDP) closed in red after registering a drop of 1.29% in September given the lower dynamism of the construction and manufacturing sectors, which had a decline of 9.41% and 9.30%, respectively, these two sectors being the ones that absorb the most labor, according to official figures from the INEI.

With this result, the national economy accumulates its third consecutive negative quarter, registering a drop of around 1% between July and September, as detailed from the Peruvian Institute of Economics (IPE).

Juan Carlos Odar, director of Phase Consultores, points out that these three quarters of decline are the longest recessionary period since 1991 without considering the stage of the pandemic, when the fourth quarter of decline was recorded.

The statistical entity also specified that the GDP national grew 0% in the last 12 months, which is a reflection of the speed at which the recession has occurred in our country.

“Six months ago we were still growing at around 1.7% in annual terms; So, the slowdown and contraction of economic activity has been so pronounced that it has already gone from 1.7% to 0%,” Odar stated.

Six sectors in red

The fishing sector has fallen the most this year with a decline of 26.36% due to the lower tonnage captured of species of maritime origin at -29.14% and of continental origin at -9.34%.

Meanwhile, construction accumulated a drop of 9.30% due to the decrease in domestic cement consumption by -12.38%, and a gradual advance in construction activity, mainly in the private sector. This, despite the fact that there was an increase in the physical progress of works by 1.33%.

Manufacturing, for its part, decreased by 7.10%, as a consequence of the lower level of production of the non-primary subsector by -9.06% and the primary subsector by -1.34%. Other items with falls are the financial and insurance sectors (-8.26%), telecommunications (-6.41%) and agriculture (-3.65%).

No chance to grow

So far this year, economic activity shows a drop of 0.63%; Therefore, the chances of having a positive annual figure at the end of 2023 are almost impossible.

In the opinion of Juan Carlos Odar, in order to achieve a rate of 0%, one must aspire to have growth of around 1.7% in the fourth quarter, which is very complicated. “Given current conditions, it is unlikely to even have 0% growth this year; Most likely, we are talking about negative territory,” says the director of Phase Consultores.

From the IPE they foresee that the GDP in 2023 will close with a decline of 0.3%being one of its biggest falls in the last 25 years without considering the pandemic crisis.

The key

Optimism. The Minister of Economy, Alex Contreras, hopes that a recovery in GDP will begin to be observed from the first quarter of 2024.