|
Last year’s best-performing economy in the
Latin American region is also well poised to take the top spot this year.
Favourable developments in those parts of the economy, which depend on
natural resources, have spilled over to other sectors of the economy. As a
result, domestic demand has gained sufficient speed to offset faltering
global demand, which, nevertheless, will forestall an even more resilient
performance. |
|
December yet another month with
resilient growth
In December, the economy expanded by 6.3% compared to the same month the
in 2001, according to preliminary estimates. Moreover, the November
reading, originally reported at a strong 5.9%, was revised upward to 6.2%.
The December performance was ahead of market expectations, which had
already been bullish at 5.8%, owing to the buoyancy demonstrated by the
Peruvian economy in the past months. Surging fishing and strong
manufacturing were the key drivers behind the year-end boost of the
economy, whereas mining performed very poorly and actually turned in the
first negative reading since February 2001. The decline is in part due to
a high comparison base for the same month in 2001, when the sector
registered a very strong surge exceeding 30%, as the then new Antamina
copper-zinc mine reached full commercial production levels. In addition,
the sectoral decline reflected lower oil and gas output volumes.
2002 brings highest expansion in region to Peru
As a result of the year-end boost, gross domestic product (GDP) expanded
even faster in the fourth quarter than the anticipated 5.2%. According to
the Central Bank, GDP expanded a whopping 5.6% in the fourth quarter of
2002 compared to the same period in 2001, pushing GDP growth for the full
year to 5.2%. Last year’s growth rate was the highest expansion observed
since 1997 and represents a sound rebound from the 0.6% growth observed in
2001. Moreover, the boost in output put Peru at the helm of economic
growth in the region, well ahead of the usual suspects Chile and Mexico.
Growth led by private-sector domestic demand, as government saves and
lacklustre global demand
The fourth quarter marks the sixth consecutive quarter with positive
growth but actually came in a notch below the 5.7% growth recorded in the
third quarter of 2002 and 6.2% registered in the second. That said, the
fourth quarter primarily profited from surging domestic demand (Q4: +6.2%;
Q3: +5.8%). The resilience of domestic demand in the fourth quarter
resulted from the dynamism in private consumption (Q4: +4.9%; Q3: +4.9%),
private investment (Q4: +4.3%; Q3: +4.5%) and a considerable build-up of
inventories, as businesses restocked their shelves to meet the pick-up in
consumption. Private consumption growth was the result of increases in
disposable incomes and higher employment levels. The rise in private
investment was mainly due to higher activity in construction and increased
purchases of capital goods. Public sector activities actually slowed the
speed of economic expansion, as the Toledo administration limited spending
in order to meet the deficit target agreed to with the International
Monetary Fund (IMF, details see below). Public consumption expanded a
meagre 0.5% over the fourth quarter in 2001 and public investment even
dropped a staggering 12.3%. The external sector also slowed down over the
third quarter, as export growth slowed from 3.8% in the third quarter to
2.9% in the fourth, while import growth accelerated (6.5% after 4.2% in
Q3) due to higher purchases of capital goods for industry, building
materials, raw material and consumer goods.
Broad-based growth as all sectors increase over year-ago period
On a sectoral basis, fishing led growth, expanding a whopping 26.1% over
the fourth quarter 2001 (Q3: +7.8%), as the government lifted a ban on
anchovy fishing, which had ruined the fishing season at the end of 2001.
Abundant fish input also boosted manufacturing based on raw materials in
the final quarter 2002, which expanded 8.1% (Q3: -1.6% year-on-year). In
combination with healthy non-primary industries, the total manufacturing
sector added 7.3% over Q4 2001, following on 5.6% growth in the third
quarter. Growth in the important mining sector continued to slow due to
the less favourable comparison base in 2001 (see above), expanding a
meagre 2.1% in the last quarter of 2002. Construction activity, also
slowed from the buoyant 11.4% registered in the third quarter to “only”
4.0%. Commercial activities profited from the consumption recovery and
added 4.4% in the fourth quarter, following 3.4% growth in Q3. Finally,
“other services”, which consists of financial services, real estate,
hotels and restaurants among others - which account for more than half of
total GDP - expanded 5.8% (Q3: + 6.4% yoy).
|
