Peru’s economy expanded at its fastest pace in 11 months in July as a booming construction activity and consumer demand offset a slump in metal exports.
Economic activity rose 7.2 percent from the same month a year earlier after a 7.1 percent expansion in June, the government’s statistics agency said today in an e-mailed report. The median estimate of 11 economists surveyed by Bloomberg was for growth of 6.9 percent.
Construction of copper mines, malls and highways in Peru is fueling the fastest economic growth in South America. Surging consumer demand from a growing middle class is boosting the retail, service and banking industries and will underpin economic growth of 6 percent this year and next, Finance Minister Miguel Castilla told Congress Sept. 11.
“The middle class is buying because incomes have increased, and that’s sustaining growth,” said Pedro Tuesta, a Washington-based Latin America economist at 4Cast Inc. “The weaker global economy is preventing Peru from growing at rates of about 9 percent. We don’t see any sources of weakness in the coming months.”
Peru’s central bank cited a weaker global economy, a sustainable pace of domestic growth and tolerable levels of inflation as reasons for keeping the benchmark interest rate at 4.25 percent at its Sept. 7 meeting.
The construction industry expanded 21 percent in July and retail rose 6.9 percent while manufacturing climbed 4.8 percent on rising textile exports, the agency said.
Peru posted a trade deficit of $192 million in July as metals led a 20 percent drop in exports and imports climbed 23 percent, the agency said Sept. 11.