Peru's Economic Growth

LIMA (Reuters) – Peru's economy expanded for the fourth consecutive month in July, driven by all sectors except agriculture, as per official data released on Sunday. This ongoing recovery follows a recession last year.

The 4.47% year-on-year growth in July surpassed the expectations of Peru's central bank chief economist, who had predicted around 4% expansion.

Larger investments were cited as a significant factor aiding recovery, aligning with the government’s target of 3.2% growth for the year. Peru is the world’s third-largest copper producer.

July's growth was a notable increase from the previous month, which saw an economic expansion of only 0.21%.

Manufacturing saw a remarkable increase of 10.91%, while the mining and hydrocarbons sector grew by 3.10%, driven by increased metallic mining activity, particularly in molybdenum concentrate and silver. However, the production of zinc, copper, and iron experienced a decline.

In contrast, the agriculture sector contracted by 3.93% due to smaller planted areas, adverse weather, and premature harvesting of various crops, including olives, dry beans, paprika, potatoes, cocoa, and hard yellow corn.

Historically, Peru has been one of South America’s leading economic performers. Nevertheless, the economy contracted by 0.6% last year, influenced by unfavorable weather, reduced private investment, and the effects of anti-government protests that impacted the mining sector.