Peru January GDP growth accelerates

Peru's economic growth picked up modestly in January.

GDP growth was 2.8% in January, up from 1.3% and 2% in December and November, respectively, the statistics office said in a report.

Manufacturing climbed 0.2% but metallic products fell 22.3% compared with January 2017.

Iron ore (+33%) and molybdenum (+15.9%) production both rose in January as Shougang, China Minmetals and Antamina ramped up operations, the agency said.

Mining production contracted by 1.5% as copper fell 3.4%, as did zinc (-3.4%), gold (-5.4%), silver (-6.1%), lead (-13.2%) and tin (-6.4%). Mining output fell due to dwindling ore grades at many mining operations, according to the agency.

Construction expanded 7.8% as central and local governments increased public spending and cement sales climbed 6.6%. Public works saw 27.6% progress, the agency said.

Peru's central bank last week cut its benchmark lending rate to 2.75%, citing controlled inflation. The bank will probably move towards rate cuts later this year, according to UK consultant firm Capital Economics.

"Inflation is likely to edge up over the second half of the year," analyst Edward Glossop wrote in a report. "Peru's economic recovery is set to gain momentum with help from looser fiscal policy."

The government is struggling to accelerate spending on a 26bn-sol (US$8bn) reconstruction program following record flooding and landslides sparked by the El Niño phenomenon last year.