Peru's economy grows at slowest pace in two years

Peru's economy grew at its slowest rate in more than two years in April, expanding 4.37 percent from the same month a year earlier as exports stumbled on global turmoil, official data showed on Friday. The result was well below the 5.3 percent expected by economists surveyed by Reuters, but sequential monthly growth was still 0.1 percent in April from March, the INEI statistics agency said.
Despite the lower-than-expected monthly figure, Peru's central bank raised its forecast for 2012 to 5.8 percent from 5.7 percent on Friday thanks to strong domestic demand, but said weaker exports will widen the country's current account gap.
The central bank now expects a trade surplus this year of $6.7 billion, less than $9 billion previously forecasted - mainly because global woes erode prices and demand for its metals exports.
The narrower trade surplus will contribute to a wider current account deficit, which has been covered by ample foreign investment, to 2.7 percent of gross domestic product from 1.5 percent of GDP.
Manufacturing fell 4.25 percent in April on lower demand while fishing slumped 48.55 percent as fewer anchovies were caught in the world's top fishmeal producer.
Growth in mining and energy slowed to 1.45 percent in April compared to 6 percent in March in the second largest producer of copper and silver in the world. Mining accounts for 60 percent of Peru's exports.
Peru's trade minister told Reuters this month the country is evaluating contingency plans to help shield exporters from the debt crisis in Europe, where Peru sends 18 percent of its exports.
Peru's government expects 2012 growth to be 6 percent, slightly higher than the central bank's view. That would be below 2011's 6.92 percent growth but potentially still one of the fastest rates in Latin America.
The central bank said in its monthly monetary policy report last week that uncertainty in global financial markets has increased. The bank has held interest rates steady at 4.25 percent for 13 months and is widely seen keeping rates on hold for the rest of the year.
The national statistics agency also said in its report the average unemployment rate in metropolitan Lima in the three months through May fell 0.2 percentage point from a year ago to 7.2 percent.