Peru GDP growth edges higher in November
Peru's economic growth picked up in November, a month that saw higher output of copper, zinc, lead and iron ore, while gains in manufacturing, electricity, fishing and telecommunications helped offset the slowing construction, banking and agriculture sectors, the government said.
GDP growth was 3.6% on a 12-month basis compared with 2.1% in October and 4.1% in September, Peru's statistics office said in a report. Mining production rose 20% compared with 22% in October, while manufacturing expanded 2.9%.
Copper output rose 34% as Chinalco and Hudbay Minerals both ramped up production at new mines and Freeport-McMoran and China Minmetals brought online new projects, according to the agency. Iron ore production jumped 66.5% after a 19 day strike at sole producer Shougang Hierro Perú, while zinc gained 9.7%, gold rose 7.4% and molybdenum climbed 1.4%.
Lead production fell 9.2% due to declines at Volcan, El Brocal and Trevali Mining, while that of silver dropped 1.9% as Volcan, El Brocal and Antamina saw lower output and tin production at Minsur – Peru's only producer – decreased 2.2%, the statistics show.
GDP probably expanded 2.5% in the fourth quarter, compared with 4.4% and 3.7% in Q3 and Q2, respectively, as mining contributed less to the economy and construction contracted due to the lack of public spending on infrastructure, according to Credicorp Capital.
"Rather weak domestic demand at the end of 2016 implies a slow start to 2017," Credicorp analyst Joao Ribeiro wrote in a report. "We don't expect major changes in the economy's performance at the beginning of 2017. Recovery in domestic demand will be gradual and will be seen with greater clarity in the business environment starting in the second half."
Construction contracted by 8.7% in November compared with 12 months before as progress on projects declined 19% and central, regional and local governments all cut public spending, the agency said. Cement sales fell 5.1%
President Pedro Pablo Kuczynski, who took office in July, has pledged to fast-track infrastructure projects totaling US$25bn as well as spur investment in mining and energy.
Peru's central bank last week kept its benchmark lending rate unchanged at 4.25% for a 12th month, citing slower growth. Both the bank and the finance ministry expect the economy to grow a brisk 5% this year.
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