Economy

Peru's economy grew by 58.49% with the nation gripped by election uncertainty

Peru's economy grew by 58.49% in April bolstered by soaring growth in key mining and fishing sectors

Surco market in Lima Peru
Photo: REUTERS/Mariana Bazo
  • Government statistics agency INEI highlighted sharp expansions in the manufacturing, fishing and mining sectors as major factors contributing to Peru’s fledgling recovery;
  • Agricultural production fell off slightly, hampered by drought and a reduced planting area;
  • But the economy has yet to fully recover to pre-pandemic levels, the agency noted.

Peru‘s economy grew by 58.49% in April, the government said on Tuesday, bolstered by soaring growth in key mining and fishing sectors and by a low basis for comparison with the same month in the previous year due to the COVID-19 pandemic.

The data came with the copper-rich Andean country stuck in a political impasse as tensions rise over the yet-to-be confirmed result of a tight June 6 run-off election between socialist Pedro Castillo and right-winger Keiko Fujimori.

READ ALSO: Peru’s leftist Pedro Castillo slightly overtakes Fujimori with 99% of votes counted

Castillo, who has pledged to redraft Peru’s constitution and hike taxes on mining firms, has a narrow 45,000-vote lead in the count with over 99.99% of ballots counted, but the result has been delayed with Fujimori seeking to get votes annulled.

The leftist’s rise was driven by left-behind rural voters, who have felt the sharp impact of the world’s deadliest per capita COVID-19 outbreak that has seen poverty and inequality levels rise as the mining-driven economy has tanked.

READ ALSO: Political risk haunts Latin America investors as Peru election nears

Government statistics agency INEI highlighted sharp expansions in the manufacturing, fishing and mining sectors as major factors contributing to Peru’s fledgling recovery. Agricultural production fell off slightly, hampered by drought and a reduced planting area.

But the agency also noted that the spike in growth could be in part attributed to a low basis for comparison. Peru’s economy in April 2020 contracted by 39.09%, ravaged by quarantines imposed to help contain the spread of the coronavirus.

READ ALSO: Can instant payments displace cash in Latin America? In Peru, Yape is leading the way

The economy has yet to fully recover to pre-pandemic levels, the agency noted.

“The production results for April 2021 still have not exceeded the output levels registered in April 2019 (pre-pandemic year), showing a decrease of -3.46% with respect to production that month,” it said in a statement.

The South American nation, which is the world’s second largest producer of copper, has suffered the world’s deadliest COVID-19 outbreak per capita, and last year posted its worst economic contraction in three decades.

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