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Economy
expands below expectations in August
In October, the economy expanded by 4.1% compared to the same month 2002.
The reading was half a percentage point above the September result, when
the economy expanded at an annual rate of 3.6% and also above market
expectations of 3.5% growth, according to last month’s Consensus
Forecast. In fact, October constituted the strongest month since
June 2003, when the economy expanded by 6.2%. In seasonally adjusted
terms, the economy grew 0.5% over the previous month.
Fishing
rebounds in October lifting primary manufacturing
While the October growth reading came in relatively close to the September
figure, the various economic sectors developed along distinctly different
lines in the two months. In October, fishing activity grew by 27.2%,
following on a 5.8% contraction in September, as the sector profited from
favourable climatic conditions, which more than doubled the anchovy catch
compared to October 2002. Anchovies account for almost half of the
total fishing output and the large swings in the catch volume from month
to month, induced by changing climatic conditions and government imposed
fishing bans, characterise the boom and bust pattern of the entire
Peruvian fishing sector.
Primary
manufacturing, which depends to a large extent on fishing as an input,
also profited from the recovery of the fishing industry. In October,
manufacturing based on raw materials increased 4.9% over October 2002,
almost double the 2.6% growth rate observed in the previous month.
Non-primary
manufacturing slumps amid a massive deterioration in capital goods output
Growth of non-primary manufacturing, on the other hand, slowed compared to
September. The 0.3% annual growth rate observed in October was only
a fraction of the 2.6% expansion registered in September. The
deterioration affected all sub-categories. Consumer goods production
dropped 0.5% year-on-year, following on a 0.1% yoy contraction in
September and capital goods output reverted from a strong 30.0% expansion
in September to a 9.2% contraction in October. Intermediate goods
production also deteriorated compared to the 5.7% expansion registered in
September but managed to remain in positive territory with a growth rate
of 1.8%. Owing to the much larger weight of non-primary
manufacturing, total manufacturing activity grew at a slower pace in
October (+1.2% yoy) than in September (+2.6% yoy).
Mining
slumps amid reduced growth of gold and zinc output
Mining experienced the sharpest slowdown of all sectors. In October,
the sector grew by only 4.7%, less than half the 10.0% growth observed in
September. In September, the sector had profited from a robust
increase in gold output (+22.3% yoy) from the Yanacocha mine and from a
strong rise in zinc production (+31.4% yoy), as the Antamina mine
quintupled its output of the metal. In October, these sectoral
boosters were absent – Zinc grew 4.2% and gold 9.2% -- accounting for
the lower growth of the mining sector overall.
Growth
in all other sectors improved over September: electricity and water
expanded 4.8% over October 2002 (September: +3.6% yoy), construction added
7.5% (September: +2.3% yoy), commerce grew 2.7% (September: +2.3% yoy) and
other services expanded 5.9% (September: +2.5% yoy).
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