Peru’s gross domestic product (GDP) shrank more than expected in July, raising the prospect that the central bank could continue the monetary easing that began this week.
“Peru’s economy fell 1.3% over the previous year. Manufacturing production was down 14%, while building activity was down 8.8%. Mining was a bright light, with an 11% increase,” according to the national statistics agency.
The result prolongs the economy’s slump and calls the finance ministry’s prognosis of an early recovery into question.
The central bank dropped interest rates for the first time since the COVID-19 pandemic, dropping its base rate by a quarter percentage point to 7.5% on Thursday.
Peru was the fastest-developing major economy in Latin America for much of this century, but it is gradually losing its sheen.
