Growth slows slightly in Peru.(Brief article)

Peru's consumers-at least in the country's cities-deserve some of the credit for a GDP growth record in 2006 of 8.0 percent, according to both the International Monetary Fund (IMF), and Peru's National Statistics Institute (INEI). A Reuters story, filed from Lima on May 15, 2007, said, "Peru's economy grew 8.0 percent in 2006, its fastest in 11 years, due to robust domestic demand and rising mineral exports."

But the same Reuters story reported that growth in March 2007 was at its slowest pace in nearly a year. GDP expanded 5.59 percent when compared with March 2006. An under performing agricultural sector (down 0.9 percent) took part of the blame. Fishing, an important industry in Peru, was also down, contracting 17.09 percent. And both market segments together dragged down an otherwise strong performance in construction (up 10.56 percent), said Reuters. Percentage figures are year-on-year comparisons.

Reuters quoted INEI as saying, "The figure appeared weak only because the corresponding figure a year ago-12.2 percent-was so strong." INEI added that March 2007 was the 69th straight month during which the Peruvian economy grew. GDP growth for the year ending in March 2007 was reported at 7.89 percent.

The IMF expects Peru's GDP to expand 6.0 percent in 2007. For 2008, the IMF forecast is GDP growth of 5.5 percent. Inflation in Peru is a non-issue. The IMF says that growth in the rate of inflation in 2007 will be only 1.0 percent-continuing good news for consumers.

Unemployment, however, remains a serious problem. INEI releases data only for Lima. In the February 2007 through April 2007 period unemployment in the capital was 9.0 percent. Most observers suspect under employment is also substantial.

Print Get the Mag Weekly Updates