Peru’s economy grew much less than expected in April, in a blow to the country’s government which has been focused on increasing growth after crippling protests.
(Bloomberg) — Peru’s economy grew much less than expected in April, in a blow to the country’s government which has been focused on increasing growth after crippling protests.
The economy expanded 0.3% from the same month a year ago, the national statistics agency reported Thursday. The median forecast of nine analysts surveyed by Bloomberg was over five times higher, at 1.7%. Only two analysts had estimates below 1%, three expected 2% or higher.
Massive anti-goverment protests following the Dec. 7 impeachment of President Pedro Castillo helped drive the economy into a first-quarter contraction. The government’s economic team had looked to April as a bellwether of how the country’s economy is really performing.
Read More: Impeachment Mania Unravels an Economic Miracle in Latin America
The April figure is especially disappointing for Peru’s Finance Ministry, which is in the process of implementing its second stimulus program meant to jumpstart growth. Finance Minister Alex Contreras had once predicted an April expansion of as high as 4%, before revising the forecast earlier this month to between 0.6% and 0.7%.
In the first four months of the year, the economy contracted 0.24%, the statistics agency said.
The result was weighed down by a contractions in the agribusiness, construction and manufacturing sectors. While mining rose 17%, that’s compared to a low base of last April when protests disrupted two key copper mines.
More bad economic news could soon follow, with an expected El Nino weather pattern that could bring renewed rains and flooding, as well as disrupt the agrobusiness industry and trigger more food inflation. Peru’s central bank recently conceded inflation is unlikely to fall to 3% by the end of the year, as it had forecast previously.
–With assistance from Rafael Gayol.
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