Peru’s economy slowed more than analysts expected in March as weaker global growth reduces demand for the country’s metal and manufacturing exports.
Economic activity grew 3 percent from the year earlier, the national statistics agency said in a report issued today in Lima. That compares with the 4.5 percent median forecast of 13 economists polled by Bloomberg and was the weakest pace since October 2009.
China’s slowing economy and recession in Europe are damping growth in the world’s third largest copper and zinc exporter. Peru’s central bank on May 9 cited weak global markets and slowing inflation as rationale for keeping benchmark lending rates at 4.25 percent for a 24th straight month.
“The figure will put the central bank on its guard though it won’t lead to a rate cut,” Walther Benavides, a bond trader at BBVA Banco Continental, said by phone from Lima. “There’s been a declining trend in GDP. Another month of growth at 3 percent will at least lead the central bank” to adjust the language of its communiques.
Gross domestic product in the Andean nation will grow 6.15 percent this year, exceeding the Latin American average by more than two percentage points, according to analysts surveyed by Bloomberg.
Still, manufacturing fell 3.6 percent in March from last year, partially offsetting a 3.8 percent increase in construction and 4 percent gain in retail, the agency said today.
Peru’s exports slid 16 percent in March from a year ago, the fourth straight monthly decline. Annual inflation eased to 2.31 percent last month, the lowest in more than two years, from 2.59 percent in March.
The sol fell 0.8 percent to 2.6250 per U.S. dollar at 12:22 p.m. in Lima, according to Datatec prices.