Peru: Economy up 3.8% in 1Q 2021 due to reactivation measures

12:42 | Lima, May. 21.

Peru's Gross Domestic Product (GDP) grew 3.8% in the first quarter of the current year if compared with the similar period of 2020, following the contraction registered in the four previous quarters, the National Institute of Statistics and Informatics (INEI) reported on Friday.

According to the Technical Report on the Performance of Peruvian Economy, this result is associated with economic reactivation measures implemented to counter the impacts of the COVID-19 pandemic.

GDP growth was influenced by the increase in domestic demand (6.5%), while net exports decreased due to the drop in exports (-5.5%) and the increase in imports (5%).

Likewise, higher domestic demand is explained by higher spending on goods and services for private final consumption (2.1%) and government consumption (7.2%), as well as by greater gross fixed investment (30.4%).

Furthermore, gross fixed investment rose by 30.4% as a result of higher expenses in new construction, which expanded by 41.9%, as well as higher acquisitions of machinery and equipment (16.2%) associated with purchases of equipment of national (3.1%) and imported (23.8%) origin.

Moreover, private investment expanded by 31.6% and public investment by 26.4%.

In addition, private final consumption rose by 2.1% in the analyzed quarter and private final consumption grew 2.1%. This increase is mainly associated with the recovery of production and job creation due to the implementation of economic reactivation policies.

According to the preliminary results of the National Household Survey (ENAHO), the employment of independent workers grew 3.2%. This group includes employers and self-employed workers.

On the contrary, the employment of dependent workers decreased (-6.2%). According to ENAHO, nominal spending on food consumed at homes increased in the first quarter of 2021 by 6.4%.

The foods that experienced the highest consumption were: sugar and sweets (17.3%); coffee, tea, and cacao (17%); oil and fats (14.6%); bread and cereals (11.8%); legumes and vegetables (11.0%); milk, cheese, and eggs (8.5%); meat (6.4%); fruits (4.6%); fish (4.2%); and other food products (4.8%).

On the other hand, the consumption of alcoholic beverages (-26.7%), non-alcoholic beverages (-15.6%), as well as food prepared and consumed at homes (-14.9%) declined. 

For its part, Government final consumption expenditure increased 7.2%

In the first quarter of this year, government final consumption expenditure increased 7.2% due to higher spending on public health (18.9%), public administration and defense (1.8%), as well as on public education (0.8%).


Published: 5/21/2021