Peru mining industry led rebound in June - Scotiabank
Peru's economic growth rebounded in June from its sluggish pace the previous month, as rising mining, natural gas and electricity production offset declines in construction, fishing and retail.
A report from Scotiabank said GDP expanded partly due to gold production, which was hampered last year by a crackdown on illegal mining operations. GDP posted 1.2% growth in May, less than half of what the market expected.
"For June we see slightly better economic activity in June than in May," Scotiabank Perú analyst Carlos Asmat said in the report. "We expect economic activity to post growth rates of around 2% in the short term, and rates of around 3% in the last months of the year."
Natural gas production jumped 21.4% in June, while electricity output rose 5.5%. The fishing industry, which is bracing for the El Niño weather phenomenon this year, slumped due to smaller anchovy catches, while construction saw less activity due to a 10.3% decline in public spending. The retail sector also contracted as new automobile sales fell 9%, the bank said.
Growth in May, which lagged a 4.3% GDP expansion in April and 2.7% in March, was dragged down by the iron and steel industries (-29.7%), construction (-13.6%) and hydrocarbons (-22%). Mining (+8.7%), Banking (+9.5%), fishing (+23.2%), electricity (+5.5%) and telecommunications (+6%) posted gains, the government said.
"The end result was different from our estimate due to the steep drop in the construction sector due to slower than expected progress in public works as a result of less spending by regional governments," said Asmat, who had forecast 2.4% growth in May.
Peru's finance minister Alonso Segura said earlier this year that 2015 growth may lag behind the ministry's 4% forecast due to the commodities price slump. The central bank this month kept its benchmark lending rate unchanged for a fifth month at 3.25%, citing negative business and consumer confidence indicators.
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