Peruvian economy grows 0.29% after six months, but with sectors in “red”, what are they?

External demand reflected in the export of goods increased by 10.72%, due to greater shipments of traditional and non-traditional products, indicated the INEI.

The Peruvian economy is making its way towards a possible recovery after six months in the “red”. In November 2023, national production increased by 0.29%, compared to the same month in 2022, reported the National Institute of Statistics and Informatics (INEI).

The positive result in November was driven by the sectors: agriculture; fishing; mining and hydrocarbons; electricity, gas and water; trade; transportation, storage and courier; government services and other services.

On the contrary, the manufacturing sectors showed unfavorable behavior; construction; accommodation and restaurants; telecommunications and other information services; financial and services provided to companies.

“In the month of analysis, external demand reflected in the export of goods increased by 10.72%, due to greater shipments of traditional and non-traditional products,” indicated the INEI report.

The November data was not enough to see a positive accumulated result. In the first 11 months of last year, the gross domestic product (GDP) decreased by 0.57% and during the last 12 months, December 2022-November 2023, it decreased by 0.42%.

These results only confirm what different analysts and consulting firms had already anticipated: the Peruvian economy would have closed 2023 with a contraction of 0.5%.

Agricultural
According to the INEI, the agricultural sector increased by 1.19% due to agricultural activity (2.44%); meanwhile, livestock production was reduced (-0.60%).

Among the agricultural products that contributed to this result, paprika (98.34%), watermelon (92.92%), artichoke (66.59%), onion (36.06%), grapes (27.6%), husk rice (22.9%) and hard yellow corn stood out. (17.83%), given the greater planted area of crops.

On the other hand, the livestock products that showed contractionary behavior were: poultry (-1.47%), goats (-1.45%), eggs (-1.27%) and fresh milk (-0.94%), among the main ones.

Fishing
The production of the fishing sector increased 60.96% due to the greater extraction of species of maritime origin (68.90%), with a greater contribution from fishing for indirect human consumption (anchovy for fishmeal and fish oil), reporting a catch of 766,419 tons, compared to 311,499 tons in November 2022. The anchovy landing corresponded to the second month of the second 2023 fishing season (north-central zone).

Likewise, fishing for direct human consumption grew 3.38% due to the greater landing of species for frozen (9.7%) and for fresh consumption (2.7%); On the other hand, it decreased for curing preparation (-57%) and canning preparation (-14%). On the other hand, fishing of continental origin grew 7.27%, associated with the greater catch destined for fresh consumption.

Mining and hydrocarbons
Mining and hydrocarbons grew by 8.04% due to the expansion of metallic mining activity by 10.60%, driven by the higher production volume of copper (11.7%), molybdenum (19.5%) and gold (9.7%).

On the other hand, the hydrocarbon subsector decreased by 7.98%, due to lower exploitation volumes of natural gas (-13.2%), natural gas liquids (-5.9%) and crude oil (-4.2%).

Manufacture
The manufacturing sector decreased by 0.51% explained by the lower activity of the non-primary manufacturing subsector (-6.72%); while the primary manufacturing subsector grew (18.45%).

The lower level of production in the consumer goods industry (-7.07%) and intermediate goods industry (-6.91%) contributed to the result of the non-primary subsector; On the contrary, the capital goods industry grew (33.58%).

The positive performance of the branches of fish processing and preservation (56.8%), manufacturing of primary precious metal products (9%) and manufacturing of oil refining products (10.3%) contributed to the result of the primary subsector. However, the sugar manufacturing branch contracted (-2.9%); as well as meat production and preservation (-0.2%).

Electricity, gas and water
Electricity, gas and water increased 0.69% due to the greater generation of electrical energy (0.61%), water production (1.08%) and gas distribution (1.62%). The electricity subsector was driven by increased hydroelectric energy generation (24%) and non-conventional renewable energy (69.9%); On the other hand, thermoelectric energy was reduced (-19.1%).

The positive result of the water subsector contributed to the largest volumes of drinking water production by the companies EPS Grau (7.5%), Sedapal (2.2%), Seda Chimbote (1.9%) and Epsel (1.7%). Gas distribution grew due to greater shipments to Vehicular Natural Gas marketing establishments (9.4%) and to companies (1.8%); On the contrary, distribution to electricity generators decreased (-1.6%).

Construction
Construction, one of the main sectors that create jobs, contracted by 8.05% reflected in the low internal consumption of cement (-8.37%) and the lower physical progress of public works (-7.80%). The lower domestic consumption of cement was linked to lower private investment in construction, as well as self-construction.

The contraction of the physical progress of public works at the Local Government level (-32%), was partially offset by investment at the National (36.9%) and Regional (6.3%) levels. In this regard, road infrastructure and basic services projects were affected. Meanwhile, the construction of non-residential buildings and risk prevention works grew.

Trade
The commerce sector increased by 1.30% due to wholesale sales (1.69%), highlighting the sale of fuel; food, beverages and tobacco due to greater rotation of food products, carbonated beverages and waters, due to the advance of the summer season and Christmas campaign; machinery and equipment for the mining, construction and sanitation sectors; as well as for the health sector through public-private tenders and measures aimed at facing the El Niño Phenomenon.

In addition, retail sales grew (1.73%) observed in the largest sale of agrochemical, veterinary and optical products; to which was added the greater demand for fuel at taps and self-services; computers and telecommunications equipment due to an increase in tenders. Meanwhile, the sale and repair of vehicles decreased (-3.77%) due to lower demand.

Accommodation and restaurants
In November 2023, the accommodation and restaurants sector decreased 0.03% due to the behavior of the restaurants subsector (-0.74%); However, the accommodation subsector grew (7.17%).

The result of the restaurant subsector was explained by the lower attendance of customers at the establishments, reduced opening hours and citizen insecurity in different districts of the country, with a greater incidence in the northern region.

In the restaurant group (-1.22%), meat and grill establishments, tourist restaurants, cevicherias, chicken shops, café-restaurants were mostly affected; among others. Likewise, beverage services decreased (-0.58%).

On the contrary, the activities of other food services (0.78%) and catering services (2.36%) grew, according to INEI data.