Peru's domestic demand will increase 3.5% in the fourth quarter of this year and is projected to continue growing faster than GDP, Scotiabank's Department of Economic Studies predicted on Tuesday.
"We expect domestic demand to grow by around 3.5% in the fourth quarter, lower than the 4.1% seen in the third quarter, but higher than the 2.5% growth projected for GDP," Deputy Manager of Real Economy at Scotiabank Pablo Nano affirmed.
"This slight slowdown would be driven by an expected lower dynamism of
private investment, mainly mining investment, which is expected to fall slightly below 10%, after having expanded at double-digit growth rates since the third quarter of 2017," he added.
Scotiabank also expects a slowdown in private consumption, due to a high comparison base from the fourth quarter of 2018, when it grew 3.8%.
"On the other hand, the dynamic public consumption is projected to continue, and public investment is likely to speed up in light of the Government's intention to increase the implementation level of the Public Budget in the fourth quarter of 2019," he stated.
Third quarter of 2019
The financial entity underscored that domestic demand grew 4.1% in the third quarter of 2019, according to figures provided by the
Central Reserve Bank of Peru (BCR), its highest expansion rate since the second quarter of 2018 and above the Scotiabank forecast of 3.6%.
"It must be noted that, although GDP growth in the third quarter (3%) was lower compared to our estimate (3.2%), this was due to a fall in exports from primary sectors, given the economic slowdown worldwide, as the non-primary sectors linked to domestic demand maintained the dynamism observed since the beginning of 2018," Nano explained.
"The expansion of domestic demand in the third quarter was led by private consumption —which contributed half of the growth— and by private investment. Likewise, although public investment showed a stagnation, public consumption —which reported its greatest increase since the fourth quarter of 2017— stood out for its dynamic performance," he added.
(END) CAN/RMB/MVB
Published: 11/26/2019