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Scotiabank: Peru economy to speed up in first quarter of 2020

10:19 | Lima, Feb. 18.

Peruvian economy will accelerate in the first quarter of the year, thus registering a growth of 2.7%, higher than the figure recorded in the fourth quarter of 2019 (1.8%), Scotiabank's Department of Economic Studies projected on Tuesday.

"We project the gross domestic product (GDP) will increase by 2.7% in the first quarter of 2020, higher than 1.8% recorded in the fourth quarter of 2019," Deputy Manager of Real Economy at Scotiabank Pablo Nano affirmed.

"This acceleration is due to two main reasons: the gradual recovery of primary sectors and the increase in public investment," he added.

Nano referred to the recovery of primary sectors, saying that unlike the fourth quarter of 2019, when bad results in the anchovy fishing campaign affected November and December GDP results, in the first quarter of this year such negative impact was only seen in January.

"The first quarter of 2020 would see an acceleration in the mining and hydrocarbons sector as a result of increased oil production, which was affected in 2019 due to a temporary closure of the oil pipeline, as well as the positive base effect in the mining output (it fell 2.2% in the first quarter of 2019)," the Scotiabank official said.
 
"As for public investment, it grew 89% in January compared to the same month in 2019. Although this variable was affected by the lack of expertise in new regional and local governments during the first quarter of 2019, the result may also reflect that the Economy and Finance Ministry's efforts to improve the implementation of public expenditure have started to yield results," he added.

On the other hand, Scotiabank believes that a factor that could limit the GDP growth acceleration is the effect of the coronavirus outbreak. 

(END) CAN/RMB

Published: 2/18/2020
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