The Economist Intelligence Unit (EIU) on Tuesday projected that Peru's GDP may expand 2.8% in the first quarter of 2020, driven by the
"We are in the process of adjusting our economic projections in response to the outbreak of the coronavirus in China, and now we expect Peruvian economy to grow by approximately 2.8% in the first quarter of this year," Analyst for Peru at the EIU Abhijit Surya expressed.
Although domestic demand will be strong,
supported by public investment recovery, the external sector will act as an obstacle to growth in these first three months of the year, considering that Peru is especially vulnerable to the Chinese economy's weakness, since exports to the Asian Giant represent more than 25% of all Peruvian exports, he told Andina news agency.
Besides, he said the coronavirus outbreak is having a negative impact on commodity prices, especially of copper, which may hurt the profitability of mining companies, although this may be partially offset by higher gold prices.
2020 GDP Projection
Surya also projects that private consumption and private investment will remain strong, supported by an expansive monetary policy.
According to the EIU reference forecast, the coronavirus impact will be temporary and largely contained in the first quarter of 2020.
Surya went on to add this will allow a rebound in demand for Chinese imports starting the second quarter of 2020.
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