Peru’s economy shrinks 0.87% in first two months of the year

Peru’s economy shrank 0.87 percent in the first two-month period of the year. In contrast, the annualized March 2022-February 2023 period increased by 1.93 percent, the National Institute of Statistics and Informatics (INEI) reported today, Saturday.

According to INEI’s National Production technical report, last February alone, national production decreased by 0.63 percent, explained by the negative evolution of the construction (10.15 percent), telecommunications (9.15 percent), financial (7.95 percent), manufacturing (1.27 percent) and agriculture and livestock (1.08 percent) sectors.

Of the five sectors that recorded a drop in the second month of the year, telecommunications and other information services were affected by the performance of the telecommunications subsector, which fell by 10.13 percent. However, the other information services subsector increased by 0.65 percent.

In the telecommunications subsector, data transmission services decreased by 16.8 percent and telephony by 14.9 percent, but internet service grew by 2.2 percent.

In manufacturing, there was lower activity in the non-primary manufacturing subsector (8.38 percent) due to lower production in the consumer goods (9.18 percent) and intermediate goods (8.63 percent) industries. However, the primary subsector grew by 24.45 percent.

Meanwhile, the agricultural sector was affected by a lower performance of the farm subsector (0.99 percent), with lower volumes of paprika (paprika) with a 74.5 percent decrease, corn (25 percent), tomato (23.7 percent), onion (22.2 percent), and potato (20 percent), affected by the unfavorable weather conditions recorded in the Peruvian coast.

A sharp drop in night temperatures was reported in the highlands, which affected crop development. However, in the jungle, on the contrary, conditions that favored the fruiting and ripening stages of crops were reported, he added.

The livestock subsector contracted by 1.20 percent due to lower production levels of eggs (3.5 percent), wool (2.8 percent), poultry (1.8 percent), and fresh milk (0.4 percent).

Despite the decrease in the sectors mentioned above, INEI reported an increase in the fishing sector (8.96 percent) due to the increased extraction of marine species (11.40 percent). However, inland fishing decreased by 4.24 percent.

The electricity, gas, and water (4.09 percent), lodging and restaurants (4.07 percent), commerce (2.37 percent), transportation, storage and messaging (2.30 percent), and mining and hydrocarbons (0.27 percent) sectors also showed an increase in production.