Peru’s Central Bank: Economic activity shows higher dynamism in 4Q 2018

Economic activity indicators show greater dynamism in the fourth quarter of this year, even though the output level remains below its potential, Peru’s Central Reserve Bank (BCR) reported Friday.

According to BCR Economic Studies Central Manager Adrian Armas, one of the indicators showing improvement is the electricity sector, which increased by 5.6% in November from the same month in 2017 and experienced several months of consecutive expansion.

Other sectors that experienced growth in the analyzed period include domestic cement consumption (6.4%), general sales tax (6.9%), formal private sector jobs (4.1%), formal wage bill (8.6%), and mortgage credit (8.8%).

“High domestic consumption denotes an important increase in public investment. All these rates are compatible with greater dynamism in the economic activity,” he stated.

International environment

Also, Armas perceives greater risk on global economic activity and increased financial volatility, both associated with recent commercial tensions.

“As is known, May and October were the months with the highest volatility this year,” he remarked.

Inflation rate

On the other hand, the BCR official affirmed the year-on-year inflation rate is projected to remain within the target range (between 1% and 3%) and around 2% in 2019.

In this sense, he considers appropriate to maintain an expansionary monetary policy stance, while inflation expectations are anchored in a context in which the level of economic activity is below its potential.


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