Activity in April was curbed by excess rains due to El Niño weather phenomenon. The monthly GDP proxy increased 0.3% yoy in April (from 0.2% in March), below market expectations of 1.7% (as per Bloomberg) and our forecast of 2.3%. Activity in April was dragged by agriculture production and construction sector likely affected by excess rains. On the other hand, mining and services sectors recovered after social protests in 1Q23. The quarterly annual rate of monthly GDP registered a practically null expansion in April (from -0.4% in 1Q23), with primary and non-primary activity at 5.8% (from 4.7%) and -0.7% (from -1.7%), respectively.
At the margin, activity recovered in April, but momentum remains soft. Using seasonally adjusted series, published by Peru’s statistics institute, the monthly GDP increased 0.4% in April, taking quarter over quarter (non-annualized) growth rate to a practically null expansion (from -0.8% in 1Q23).
Our GDP growth forecast for 2023 stands at 1.4%. Activity will likely rebound in the second quarter of this year after a weak 1Q23 affected by protests, but it will continue to be curbed during the rest of the year by the appearance of a moderate (so far) el Niño event along a tight monetary policy stance.