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Peru Growth Accelerated in November on Construction

(Corrects unemployment rate in eighth paragraph.)

Peru’s economic growth unexpectedly quickened in November, led by construction, fueling expectations the central bank will keep its key interest rate on hold as inflation remains subdued.

Economic activity climbed 6.8 percent from the same month a year earlier, the government’s statistics agency said today at a news conference in Lima. The median estimate of 12 economists surveyed by Bloomberg was for growth of 6.4 percent.

Peru’s $200 billion economy is leading growth in South America as a mining-led investment boom spurs construction activity. A recovery in Chinese demand for Peru’s metal exports this year will compensate for weaker investment as social conflicts delay mine projects, enabling the central bank to keep its benchmark rate at 4.25 percent for all of 2013, said Roberto Flores, the head of research at Inteligo SAB.

“Growth will be very similar to last year but we’ll see a re-balancing in the drivers,” Flores said in a phone interview in Lima. “Although we’ve seen an improvement in business sentiment, the issue of social conflicts hasn’t gone away.”

Community protests, permit delays and cost increases in the third largest copper producing nation will damp mining investment in 2013 and 2014, the central bank said in a Dec. 14 report.

Subdued Inflation

The monetary authority kept borrowing costs unchanged for a 20th consecutive month on Jan. 10, the longest pause since it began targeting inflation in 2002, citing stable economic growth and slowing inflation. Consumer prices rose 2.65 percent in December from the year earlier, the slowest pace since February 2011.

Construction activity expanded 16.8 percent in November from the year earlier, while retail activity rose 6.3 percent and manufacturing climbed 4.8 percent, the statistics agency said. The economy expanded 1.3 percent from October on a seasonally adjusted basis.

Lima’s unemployment rate fell to 5.6 percent in December, the lowest since at least 2001, while average monthly incomes rose 4 percent to 1,326 soles ($523), the agency said in a separate report. The unemployment rate was 5.9 percent in November and 7 percent a year earlier.

The sol appreciated 0.3 percent to 2.5360 per U.S. dollar at 11:39 a.m. in Lima, according to prices compiled by Bloomberg.

To contact the reporter on this story: John Quigley in Lima at

To contact the editor responsible for this story: Andre Soliani at

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