Gross Domestic Product contracted by 0.4% in the first quarter of 2023

During the first quarter of the year 2023, the Gross Domestic Product reduced by 0.4% compared with the same quarter of the year 2022, explained mainly by the lower domestic demand (-0.6%), as well as the exports of goods and services (-1.5%). The National Institute of Statistics and Informatics (INEI) in the technical report Peruvian Economic Performance stated that this result was presented in the context of intensification of social conflicts and natural adverse events.

INEI informed that the expense of private final consumption grew 0.2% compared with the first quarter of the last year. According to preliminary results, the current expenditure of foods that registered a greater consumption were legumes and vegetables (18.1%), sugar and sweets with sugar (17.0%); bread and cereals (14.5%); milk, cheese and eggs (14.0%); other food products (11.9%); coffee, tea and cacao (10.8%); oils and fats (9.3%); fruits (7.4%) and meats (7.1%), among the main ones.

During the first quarter of this year, the government final consumption expenditure reduced in 1.7% compared to the same period of the last year. This behavior is explained due to the lower consumption expenditure in public health (-19.5%); meanwhile, it increased in public education (2.5%) and in public administration and defense (1.2%).

Gross fixed capital investment decreased by 8.5% compared with the same quarter of the year 2022, explained by the contraction of the investment in construction (-11.5%) and the lower purchases of machinery and equipment (-4.1%). Likewise, the public investment decreased by 1.4% and the private investment contracted by -10.0%.

The exports of goods and services decreased by 1.5%. Among the products which export sales decreased are the natural gas (-46.6%); iron ore (-26.1%); gold ore (-23.4%); zinc ore (-16.1%) and y meal of hydrobiological resources (-12.0%); while, it grew the shipments of refined copper (22.9%); grape (22.7%); copper ore (15.6%); as well as refrigerated and frozen fishes and seafood (7.5%).

The imports contracted by 2.1%. During this period, the plastic, rubber and synthetic fibers (-40.2%) purchase were affected as well as the transmission and communication equipment (-22.3%); Diesel (-12.9%); Synthetic organic coloring matter and preparations, and other basic chemical substances (-9.5%) and machinery for industry (-8.7%). On the other hand, the purchases of crude oil (220.5%) for automobiles (34.2%) truck automobiles omnibus and trucks (17.1%) and other machineries of general use (3.8%) were boosted.

The gross value added of the Agriculture, Livestock, Hunting and Forestry activity decreased by 0.2% compared to the same period of the last year. The agriculture subsector increased by 0.3%; while the livestock activity decreased by 0.9%.

The Fishing and Aquaculture activity grew by 22.4% due to the greater maritime fishing (27.9%), this result was counterbalanced by the fall of continental origin fishing (-3.4%).

The INEI informed that the Oil, Gas, Minerals Extraction and Related Services increased by 2.5% due to the greater extraction of minerals and related services (3.2%); while, it reduced the production of crude oil, natural gas and related services (-1.1%).

During the first quarter of this year, Manufacturing activity decreased by 0.3% due to the slowdown of the manufacturing activity, caused by social conflicts and natural disasters that affected the regular development of economic activities.

Electricity, Gas and Water activity increased by 4.6% influenced by the increase of the production of electricity and gas (5.4%) subsector and the water (0.5%) subsector.

The gross value added of the Construction activity drop by 11.5% due to a lower execution of works in the private sector; while it increased the construction of public works.

During the first quarter of 2023, the gross value added of the Commerce activity increased by 2.2%, due to the performance of the wholesale and retail sale (2.6%) commerce subsector; while it decreased the services of maintenance and repair of automotive vehicles (-2.2%).

Transportation, Storage, Postal and Courier activities increased by 0.2% associated with the progress of transportation (1.1%) subsector while, the storage subsector, postal and courier contracted by -9.7%.

Accommodation and Restaurants sector increased by 5.0% due to the dynamism of the restaurants subsector (5.7%); nevertheless, accommodation subsector reduced (-3.0%).

Telecommunications and Other Information Services activity showed a decrease of 9.4% due to the drop of telecommunications (-10.4%) subsectors and other information services (-2.9%).

Financial services, Insurance and Pensions decreased by 4.7% before the lower dynamism of financial services (-9.1%); meanwhile, services of insurance companies (16.9%) and private pension fund administrators (2.1%) showed greater dynamism.

Services Rendered to Companies grew by 1.2% compared with the same period of the last year.

Public Administration and Defense grew by 2.6% due to the greater services registered in: police operation in order to reduce crimes and misdemeanors, audit and control of public management and qualification of registry acts in first and second instance.

The gross value added of the Other Services activity increased by 3.0% due to favorable performance of all the activities which make it up, except for the public health services. The activity “other services” comprises real estate services; housing rent, public and private education, public and private health, art entertainment and recreation, repair of computers and personal use staff.

The sector other Taxes to Products and Import Duties decreased by 2.7% due to the decrease of other taxation of products (-2.1%) and import duties (-11.4%).