In February, the Peruvian economy underwent a drastic slowdown as the country’s growth rate shrank to 0.19 percent compared to a growth of 3.14 percent in January, reported Peru's National Institute of Statistics and Informatics (INEI) Wednesday.
INEI said that although internal demand mostly continued its momentum in February through the uninterrupted flow of investments in various domestic industries like electricity and mining, foreign demand for Peru's goods and services deteriorated. Peru's shrinking GDP growth in February is mainly attributable to external conditions, specifically, the 20 percent decrease in non-traditional exports such as those from the agricultural, textile, fishing, and chemical sectors.
As for internal demand, the report indicates that two of the country’s seven main industries grew in February. These expanding industries include construction, with a 4.73 percent growth rate, and agriculture, which grew 7.60 percent. On the other hand, some industries registered decreases in February, such as mining and hydrocarbons, which dropped 2.01 percent, and manufacturing, which recorded the steepest drop of 7.60 percent. INEI said that the decline in manufacturing activity was due to the decline in industries producing consumer goods, intermediate goods and capital goods.
Last year, Peru recorded one of the highest growth rates worldwide of 9.84 percent. After the global financial crisis hit, Peru forecasted a five percent growth rate in 2009, which was later cut to four percent.