LIMA, Aug 17(NNN-ANDINA) — Economy-Finance Minister Alex Contreras said the Peruvian economy contracted less in June (-0.6%) compared to the previous month, following the moderation of those shocks that had affected the agricultural and fishing sectors, which shows that GDP will continue to recover during the following months.
On Tuesday, the National Institute of Statistics and Informatics (INEI) reported that Peru’s economic activity contracted 0.6% in June.
“As a result, we have (registered) a 0.5% GDP contraction in the first half (of 2023), which will be offset by the greater recovery to take place during the second half,” Contreras said via the digital space “MEF en Vivo.”
The Cabinet member explained that there were differentiated behaviors by sectors: mining has been resilient and is growing at double digits.
The sectors associated with consumption, commerce, and services are growing at lower rates than last year; nonetheless, they have continued to grow. In turn, the farming sector is recovering. Yet the drop still persists in the fishing sector, but it should moderate from July onwards.
Regarding the construction and non-primary manufacturing sectors, they will recover progressively, in line with public investment acceleration and private investment recovery.
“The leading indicators for July, and even in advance for August show improvements compared to what was registered in June,” Contreras explained.
“The short-term goal is to converge into 3% growth and continue working on accelerating growth in the future,” he added.
According to the economist, the great challenge for the current administration will be to boost the recovery of 3-month-ahead economic expectations.
“All indicators of long-term expectations are already in the optimistic range, and the 3-month-ahead expectations have practically recovered from two lost years. This is something important in view of what will happen with investment going forward,” he indicated.
The minister affirmed that the Government has taken measures that will enable the economic recovery.
“S/3.5 billion (about US$972 million) from the Con Punche Peru (Peru with Strength) program will be executed between August and December of this year. There are resources to attend to the emergency, worth around S/3.2 billion (about US$888 million), which will also be executed from August to December,” the government official underscored.
“The main risk that we are going to face in the following months has to do with the arrival of El Niño phenomenon. There is a significant probability that El Niño will range between weak and moderate,” Contreras indicated.
“However, something that has caused concern at the MEF (Ministry of Economy and Finance) is that the probability of facing a strong Coastal El Niño for the summer of 2024 has been revised upwards,” he warned.
It must be noted that summertime in Peru runs from December to March. — NNN-ANDINA
