Peru’s Economy Resumes Growth as Protest Effects Wane
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Loading... - Blanco Rafael
- 17 May 2023
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Peru's economy rebounded in March following two consecutive months of decline, but the expansion was below analysts' expectations.
According to the statistics agency INEI, the country's economic activity increased by a modest 0.22% compared to the same period last year. Bloomberg's survey of nine analysts had projected a growth rate of 1.3%. Both Peru's finance ministry and central bank had predicted a return to growth in March.
In the first quarter of the year, Peru's economy contracted by 0.43%, as reported by INEI.
The contraction during the quarter and the sluggish growth in March clearly demonstrated the significant impact of the massive protests that severely disrupted the economy earlier in the year. The repercussions of the anti-government demonstrations persisted while Peru also grappled with flooding in the northern region caused by warming ocean waters. This phenomenon is expected to continue throughout the year, further straining the economy.
Peru's central bank has maintained its benchmark interest rate at 7.75% for the past four months, attributing its initial decision to pause rate increases to the ongoing unrest.
According to INEI, the unemployment rate in Lima, the capital city, dropped from 7.5% to 7.1% in the past three months.
