Peru Economy Shows Signs of Recovery

Peru’s economy showed signs of a recovery in February, as the gross domestic product expanded 5.72 percent compared to the year-earlier month.

Growth in February surpassed expectations from economists polled by news agency Reuters, which had expected growth of about 4.9 percent, according to financial daily Gestion.

February’s posting was also better than January, when the economy expanded by 4.2 percent.

The reading in February takes into account a new base year for calculating GDP. The government decided this year to change the base year to 2007 from 1994, which gave the mining sector a bigger weight in calculating GDP.

In February, the mining and hydrocarbons sector rose 7.92 percent on higher output of copper, iron and molybdenum. Manufacturing gained 5.96 percent and the finance and insurance sector rose 13.95 percent.

Construction rose 9.78 percent and retail gained 5.26 percent.

Many economists believe that Peru will post stronger growth this year after a weak showing in 2013, when the economy grew 5 percent. In 2012, it expanded 6.3 percent.

The projections for stronger growth are based in large part on the outlook for higher mineral production and infrastructure investments.

Domestic demand has been an engine of growth in the past few years, however it slowed last year. That sluggish activity has continued so far this year.

In the first quarter, for example, new car sales fell 6.8 percent from the same period last year, according to the association of automobile representatives, called Araper. The association appeared optimistic going forward, pointing to higher sales in March compared to January and February.

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