The monthly GDP proxy fell by 1.1% yoy in January (down from +0.9% in December), below market expectations of -0.9% (as per Bloomberg). The quarterly annual rate of monthly GDP stood at a soft 0.6% in January (from 1.7% in 4Q22), dragged by non-primary activity (0.3%, from 1.3%), while primary activity grew 2.7% (from 3.3%). We note the January figure was affected by protests, reflected mainly in the mining (-3.6% yoy in January), construction (-11.7%) and lodging (-4.3%) sectors. Commerce (1.2%) and service (1.0%) sectors grew at a soft pace, while volatile fishing output grew 33.0%.
Activity momentum deteriorated in January. Using seasonally adjusted series, published by Peru’s statistics institute, the monthly GDP fell by 1.4% mom in January, taking quarter over quarter (non-annualized) growth rate to -0.8%.
The upside bias to our GDP growth forecast for this year of 1.8% from a more benign external environment (strong China growth and copper prices) is likely to be curbed by a weak 1Q23. Besides the effect from protests in activity in January (which seem to be cooling down in February), harsh weather conditions (Cyclone Yaku) are threatening the economy in March.