Peru Car Loans Post Double-Digit Growth Amid Broader Economic Slowdown

Loans in Peru to purchase vehicles continued to post double-digit growth in June, even as some economists point to an overall slowdown in the Andean country that could hurt consumer confidence.

Peru’s private-sector banking association, Asbanc, said that the portfolio of vehicle loans in June totaled $715 million, up 21 percent from the same month last year, daily El Comercio reported.

Asbanc said that financing for new vehicle sales rose 12.5 percent. It said that banks approved 12,625 more vehicle loans between June 2013 and June 2012.

The data supports broader macroeconomic information showing that domestic demand and consumer spending remain robust in Peru. Sectors linked to domestic demand have been leading Peru’s growth as traditional export-based sectors such as mining have been crimped by lower commodity prices as a result of concerns about China’s economy.

Peru’s economy grew 4.96 percent in May, which was lower than expected. Many economists are lowering their forecasts for Peru’s full-year economic growth as a result of the slowdown. Growth is now seen at about 5.5 percent, while earlier it was seen at slightly more than 6 percent.

Depending on the extent of the slowdown abroad, Peru’s domestic demand and consumer access to credit to financing purchases of new vehicles and homes could be hit in the coming months, some economists warn.

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