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El Niño seen only having mild
impact on agriculture and fishing
The development of agriculture and fishing will depend largely on climatic
conditions, as Peru is in for another year of the so-called El Niño
weather phenomenon. El Niño is a large scale warming of the surface layers
in the tropical Pacific Ocean, which causes great changes in the climate;
affecting wide parts of the Americas, among them increased rainfall in
Peru. Nevertheless, according to information from the U.S. National
Oceanic and Atmospheric Administration (NOAA) from 6 February 2003, during
January 2003 there were indications that the warm episode is beginning to
weaken. NOAA expects that the El Niño conditions will continue to weaken
through April 2003. . Thus, the impact is of this year’s climate change is
expected to be much more moderate than the devastating El Niño of 1998.
Consequently, the Central Bank expects lower but still positive growth in
agriculture (+3.8%; 2002: +5.0%) and fishing (+2.3%; 2002: +4.1%). This
will positively influence output based on raw materials, which will grow
4.0%, according to Central bank estimates, while non-primary GDP should
expand 3.9%.
Inflation jumps in January
In January, consumer prices increased 0.23%, following on a month with
virtually no movements in consumer prices. The January price increase was
mainly driven by higher prices for housing, fuels and electricity as well
as food and beverages. The upside effect on the price level was mitigated
by lower prices for transport and communications. As a result of the
January price hike, annual headline inflation jumped from 1.5% in December
to 2.3% in January. Thus, within only one month annual headline inflation
moved close to the Central Bank inflation target of 2.5% with one
percentage point tolerance to either side of the central rate. The
Consensus sees inflation to end the year at 2.0%, as monetary environment
remains benign despite a pickup in consumption.
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