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Peruvian economy fell 3.4% in 1Q 2020

18:41 | Lima, May. 21.

In the first quarter of 2020, the measures taken to contain the spread of covid-19 had a negative impact on Peru's GDP, which decreased 3.4% compared to the same period in 2019.

This contraction is registered after 42 quarters of uninterrupted growth, as reported on Thursday by the National Institute of Statistics and Informatics (INEI).

In this context, the economy was affected by the national health emergency in force since mid-March to contain the pandemic —an unprecedented event in the country that had an impact on the reduction of domestic demand (consumption and investment).

Domestic demand

In the analyzed quarter, domestic demand decreased 1.8% mainly due to the contraction of private final consumption expenditure (-1.7%) after almost 19 years, and due to the reduction of private investment (-14.9%). However, government consumption spending (7.2%) and public investment (11.8%) experienced expansions.

INEI reported that household consumption spending fell (-1.7%) due to lower purchases of durable goods (-11.2%), non-durable goods (-7.5%), and services (-1.3%).

However, food consumption expenditure grew (3.9%), according to the results of the National Household Survey.

Additionally, the nominal average monthly income from work in Metropolitan Lima decreased by 0.4% and employment dipped 0.1%.

On the other hand, the government's final consumption expenditure grew by 7.2% due to higher spending on public health services (7.1%), as well as on public administration and defense (9.5%) to face the pandemic.

(END) RGP/JJN/MVB

Published: 5/21/2020
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