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Economic
growth slows in April as expected
In April, the economy expanded by 3.3% compared to the same month in 2003.
The reading was in line with market expectations, which had anticipated a
slowdown from the 5.5% annual growth recorded in March. In fact, the
April reading constituted the slowest pace observed so far this year.
The weaker growth pattern observed in the year-on-year comparison is also
reflected in data adjusted for seasonal factors, which show that the
economy contracted 0.89% over the previous month, the first contraction
since November 2003.
Mining
continues to propel growth amid higher copper and gold output
In April, mining continued to be the backbone of economic growth.
The mining sector grew 11.0% over April 2003 and thus constituted the
fastest growing sector in the economy. The sector returned to a
double-digit growth pace observed throughout this year that was only
interrupted by a bout of “weakness” in March, when mining expanded by
“only” 8.6% over the same month last year. The sector has shown
resilient growth despite a 4.1% annual slump in output of zinc, which is
Peru’s most important mining commodity. The weak zinc production
was compensated for by a strong increase in copper output. Copper
added 33.1% over April 2003, the third consecutive monthly expansion above
30%, mainly due to a recovery of full capacity at the Antamina mine,
following on a period of declining output. Robust growth of gold
(+11.3% year-on-year) and silver (+14.3% yoy) also contributed to the
strong performance of the entire sector.
Deterioration
in fishing sends primary manufacturing nose-diving
Fishing was the second-fastest growing sector. However, the 8.7%
expansion over April 2003 represented a notable slowdown when compared to
the very robust 14.0% year-on-year expansion observed in March. As a
result of the slowdown, primary manufacturing, which depends on fish as an
important input, deteriorated 2.6 percentage points reverting the 0.1%
March expansion to a 2.5% contraction in April. In addition to
fishing, lower activity in agriculture and livestock (April: -5.3%; March:
-0.1%) accounted for the slump in primary manufacturing.
Agricultural production dropped, particularly potato, corn and sugarcane
output, due to a combination of adverse climatic conditions, plagues and
lower seeding. Healthy growth in coffee, cotton, asparagus and poultry,
however, helped avert a more pronounced decline in agricultural output.
Non-primary
manufacturing remains robust amid strong consumer goods output
Non-primary manufacturing, on the other hand, continued to expand at a
robust pace even if at a slightly lower level than in March. In
April, non-primary industries added 8.0% over the same month last year,
slightly down from the resilient 9.6% expansion observed in March.
The strength of non-primary manufacturing was mainly due to higher
consumer goods output, whereas intermediate goods developed broadly along
the same lines recorded in March. Capital goods output, in contrast,
dropped 8.3%, following on almost 100% growth in March. The
robustness in non-primary manufacturing output mitigated the detrimental
impact from industries based on raw materials. As a result, total
manufacturing output increased 5.6% following on 7.8% growth in March.
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