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Peru’s private investment fell sharply between January and March, collapsing by 12%

By Paola Villar S.

Following projections made by the Peruvian government almost a month ago, the Central Reserve Bank of Peru (BCR) confirmed that Peruvian private investment registered a sharp collapse in the first quarter of that year, compared to a 1.6% growth between January and March 2022, reflecting the impact of social protests and the lower level of mining investments in the Andean country.

According to the BCR, the private investment indicator added to other factors that pushed down the growth of the Peruvian economy in the first three months of the year after the GDP fell 0.4% after two years of continuous quarterly growth.

Peruvian government, Peru’s private investment fell sharply between January and March, collapsing by 12%
The headquarters building of the state bank Banco de la Nacion in the San Borja neighborhood of Lima, Peru (Photo internet reproduction)

According to published figures, private investment fell by 12% between January and March 2023, a slightly better result than expected by the Ministry of Economy and Finance (MEF), which pointed to a 13% drop.

The central bank specified that the fall was due to the contraction of mining investment, which amounted to 23.2%, and to the drop in investment from other economic sectors, which reached 11%.

Peruvian government, Peru’s private investment fell sharply between January and March, collapsing by 12%
Private investment in Peru contracted sharply in the first quarter of the year (Photo internet reproduction)

The MEF had anticipated the first quarter drop in private investment would be the sharpest since the financial crisis more than a decade ago, not counting the collapse during Covid-19.

Indeed, the decline in this indicator is the sharpest since the third quarter of 2009 – when it fell 12.8% – excluding the pandemic years.

“This result is attributed to stoppages and lower business confidence as a consequence of social conflicts, as well as the absence of new mining megaprojects,” explained the BCR in its latest macroeconomic report.


According to the Central Bank, the Peruvian Ministry of Energy and Mines detailed that investment in the mining sector amounted to US$835 million between January and March of 2023, an amount of US$198 million lower than that recorded in the previous year’s first quarter.

This drop was reflected in lower disbursements in beneficiation plants, infrastructure, and development and preparation of mines and mining projects.

“By companies, the lower mining investment was mainly explained by: Anglo American Quellaveco made an investment of US$87 million, which represented a drop of US$230 million compared to the same quarter of 2022, given that its Quellaveco Mining Unit came into operation at the end of the third quarter of 2022,” said the BCR.

They considered that the company Anglo American had already finished the construction process of the Quellaveco mine in the south of the country.

To this impact was added the lower investment of the Las Bambas mining unit of the MMG company, which fell by US$26 million due to the lower expenditure in its beneficiation plant and the stoppages in the Corredor Minero del Sur (Southern Mining Corridor).

“Minsur was in third place – in terms of investment setback – with US$19 million less, as a result of a lower disbursement in its San Rafael concentration plant and in its Quenamari – San Rafael accumulation,” the BCR remarked.

Peruvian government, Peru’s private investment fell sharply between January and March, collapsing by 12%
Las Bambas is one of South America’s most important copper mines and is located in southern Peru. Its production represents 2% of the global copper supply (Photo internet reproduction)

On the other hand, there was a drop in investment in non-mining sectors, which, as explained by the BCR, is aligned with a decline in the volume of imports of capital goods (-10.7%) and domestic cement consumption (-15.4%).

For example, investments of companies such as Aceros Arequipa decreased by US$32 million between January and March of this year after the company recorded an investment of US$24 million in the first quarter.

This amount was allocated to its distribution center in Lurin.

It was followed by Unión de Cervecerías Peruanas Backus y Johnston, which gave US$20 million (US$8 million less than in the same period of 2022) to increase its production and commercialization capacity and to capture new market opportunities.

“La Pampilla refinery invested US$5 million in the first quarter of 2023, slightly more than the amount disbursed in the same period of 2022, which were mainly destined to projects related to safety and facilities improvements”, detailed the Central Bank.

In contrast, other companies made higher disbursements – although in smaller amounts – such as Enel Distribución, which invested US$28 million in the first quarter (US$2 million higher than the disbursement in the first quarter of 2022) due to an increase in the execution of works to expand and modernize its networks, public lighting, electrification of human settlements, as well as to ensure the quality and security of supply.

“Enel Generación increased its investment by US$6 million, mainly for increased maintenance of thermal power plants and equipment, in line with its investment plan.”

“Luz del Sur increased its investment by US$7 million for the improvement and expansion of its electric system”, stated the BCR.

With information from Bloomberg

News Peru, English news Peru, Peruvian private investment

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