Itaú BBA - PERU – Monthly GDP showed recovered in June by less than expected

Macro Latam

< Back

PERU – Monthly GDP showed recovered in June by less than expected

August 17, 2020

However, the economy is still far below pre-outbreak levels in February

Monthly GDP in June was below market expectations. The monthly GDP proxy contracted 18.1% year-over-year in June (from -32.8% in May), below our forecast of -13.5% and market expectations of -17.0% (as per Bloomberg), taking the 2Q20 annual rate to -30.4% (from -3.4% in 1Q20). The non-natural resource sectors fell by 23.9% year-over-year in June (from -34.2% May), taking the 2Q20 annual rate to -34.3% (from -3.5% in 1Q20). Within non-natural resource sectors, commerce (-28.0% year-over-year in June, from -49.6% in May), services (-21.8%, from -22.9%) and construction (-44.6%, from -66.4%) output contracted by less than before. In turn, natural resource sectors fell by 5.5% year-over-year in June (from -28.4% in May), taking the 2Q20 annual rate to -20.3% (from -2.8% in 1Q20). The lower contraction of activity in the natural resource sectors in June was driven mainly by the volatile fishing component (48.1% year-over-year in June, from -47.0% in May).



At the margin, June’s GDP recovered further, but it is still far below pre-outbreak levels (February). Using our own seasonally adjusted series, month-over-month growth stood at 22.8% in June (from 13.4% in May), taking the quarter-over-quarter annualized rate to -71.0% in 1Q20. GDP proxy in June is still 18.8% below February levels.



We expect GDP to fall by 11.9% in 2020. We expect a recovery in 2H20, supported by a large fiscal stimulus and an expansionary monetary policy. However, the recent acceleration of Covid cases could slow down the reopening of the economy. 

Julio Ruiz



< Back